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RE: Bleeding Dry
I strongly recommend Lexus and the Olive Tree and The World is Flat by Thomas Friedman, and Innovator's Dilemma (and Solution) by Clayton Christianson. The phrase "level the playing field" in your comment kind of scares me, because it sounds like someone in Congress thinks we can use tariffs or something to fix the problem. It won't work. Neither will trying to get lean and efficient in itself--and I see you know that with the latter portion of your statement about investing in innovation. They can low-ball you to pain levels you cannot possibly endure except possibly through automation, which has the same end-result for many of your employees.
I hate to sound like the Grim Reaper here, but that's pretty much how I see it. Both Friedman and Christianson do more than whine about what a lot of people see as a problem, but show how to make it into an opportunity-although I'm not saying it's going to be easy.
I'm not a business guy, and I don't know anything about your business, but price is not how you want to compete with the Chinese (I know you didn't say that). Christianson says that people are willing to pay a premium when your product is more convenient, performs better, is easier to use, etc. It's when your product and your competitor's product are both "good enough" that it becomes a commodity and they start to compete on price alone. If the specs for something say that tolerances must be within a millimeter, and your competitor meets that, and you exceed it with 1 micrometer tolerances, and his is cheaper, both are good enough and they will buy his.
So...being more responsive? A customer needs something to start quickly and you can turn it around quicker than your competitor? You can custom run small batches fast? Vertical or horizontal integration with other products that use injection molding so you are in on the design process and can respond faster? These are some possibilities where you could compete. Christianson has more with his concept of disruptive innovation--such as competing with non-consumption (more than just finding new markets for your products--new uses).
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RE: Bleeding Dry
The days of being a mediocre student and being mediocre at your job and having that tolerated are over. There are Indians and Chinese workers who would love to take that drudge work off your hands if you don't think it's worth your time.
As a person who works in manufacturing, particularly plastic injection mold making, I can say that a lot of work has already been taken off our hands. There was a time back in 2003 that not a week went by without several auction flyers coming in the mail, showing the demise of yet another machine shop or other manufacturing industry. It has slowed down to about one a month now, which is still too many; but the point here is that it is no longer just 'drudge work' that is being taken overseas, it's highly skilled work also. The days are definitely gone where molds coming from China or other countries where the labor is cheap, have anything junky or substandard about them in any way. Rather, we see some very high quality work coming out of China in particular, and they are doing it for less money than we can even buy the materials for. The bottom line in all this is that the overall value of the work that we do has dropped significantly, no matter how hard we work at it or how competent we are. The longer term effect of this is that less and less young people are getting into manufacturing which will further add to the growing deficit of 'manufacturing know-how' in this country. We already see this in our area, where it is becoming more and more difficult to find anyone under 40 that can demonstrate the necessary skills. I fear that this situation will, as you stated, eventually lead to a lessening of technological superiority if some way is not found to level the playing field in manufacturing.
I might mention one silver lining in this is found in the fact that those of us still surviving are doing so by learning to be as lean and efficient as possible. Embracing technology as much as can be afforded in an attempt to take advantage of 'lights out' unattended manufacturing is one step being made that helps, but only time will tell if we are able to adapt fast enough, and keep key manufacturing technologies in this country.
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