I recently traveled to exciting Fargo! Why would a globe trotting supply chain techie make this journey?
Besides a dubious reputation from an Academy Award winning film of the same name, Fargo and its host state North Dakota is the home of some very important elements for the US economy. I attended a rare US event, a ribbon cutting on a new Manufacturing facility. In presence for the ribbon cutting were North Dakota luminaries such as North Dakota Governor John Hoeven (Dark Jacket, red tie at podium); Senator Byron Dorgan, Chair of the RFID Caucus in the US Senate (light Jacket at podium); as well as customers and partners — a real bond of public and private partnerships (PPP’s).
In this article I hope to tackle two separate but related issues to tell you about these:
US Manufacturing presence
New RFID technology.
Last week Alien Technology (a leading provider of RFID technology) opened a new plant in Fargo, as well as announced a new tag and a new manufacturing processing capability of said tags.
When Alien thought about where to locate their plant, the obvious answer was China. No thought there. But naturally, progressive state governments wanted a chance at the opportunity and not to let another high paying job provider get away. Friendly politicians are not enough. And here in lies the point of these two streams of thought (US mfg and new cool RFID technology).
Alien created a unique patented capability called Fluid Self Assembly (FSA) along with a High Speed Strap Attach machine which produces 15% to 20% more chips per silicon wafer. Over the long haul, that increases production and reduces costs significantly.
I will discuss the implications of this one key fact from both an RFID perception as well as from a US mfg point of view.
Keeping the Jobs Here
No doubt a friendly state with a low tax base, an attractive place to live and work, a free wireless town, a good logistics set up (neat airport and highways) all play an important role in keeping or gaining new businesses.
Everywhere I went in Fargo, I had internet for free. Why is this such a hard concept to get for, say, Massachusetts (which is losing 40,000 or so professionals per year, and is the so called home of big high tech thinkers and companies) with a so-called pro-business Governor?
How about cost affordable housing for employees? How about well trained and cheerful people in the hotels, cabs, restaurants, etc.?
Do you think all this does not matter? Wake up America. Though I won’t be moving to Fargo any time soon, it left a very positive impression on this very worldly travel; quite frankly, one I have not had since my last trips to Asia.
There is hard and soft data in the above paragraph. (Tax base, less wage sensitivity due to lower cost of living, total cost of ownership on facility, transportation, etc.) — thus, a pretty nice cost package to open a plant.
But the killer point is the manufacturing process. The process is so efficient that the labor price has very low impact on the total price of the product.
No doubt these kinds of facilities have a smaller headcount. But this concept plays out in many industries from Steel (min mills) to computers, to automotive.
What’s Fargo Got That You Haven’t Got: Gadget Envy
So, the next fun thing on this trip was seeing the new tags.
RFID tag growth will be based on many factors, but without a really reliable, secure and longer read range, we will never experience a ubiquitous presence. The new Alien tag plants a flag on a higher peak, with longer readers rates — how about 100 ft in the presentation we saw! That opens up all sorts of new application opportunities, as well as reduces the nay sayers that passive technology won’t work.
If the US would think about technology investments, not just the next cool gadget, but the killer process to make them, we could maintain our leadership. What is cool about the Alien process is that not only does it produce much more at a lower price; it is also integral to the differentiated product itself. So here is this message:
High productivity (low cost process) for
A product that will sell (probably lots) in the market place.
Is this obvious, or what, Detroit? I know I am going to hear from my readers on this, but I have been to Detroit! *
* There are many very nice smart and progressive people in Detroit, but when you add it all up, the aggregate is going in the wrong direction. And as we all know, this is a huge problem, not just for the citizens of Detroit, but for the Nation.