When looking for a manufacturer that will provide you with quality, savings, and a quick turnaround, it’s essential to consider the location of your facility. While many companies are moving overseas in search of cheaper production and labor costs, it often pays to keep your company based right here in the United States. In fact, there are numerous benefits to choosing a manufacturer based in the United States over those found abroad––, especially in the long run. Below, we discuss seven of the main advantages.
1. More Jobs for Americans
Choosing U.S.-based manufacturing means creating jobs here at home for Americans. Many customers value companies that are rooted in their communities and employ their neighbors and friends, and therefore will choose those products over your competitors for that very reason.
By keeping your manufacturing in the United States, you can be sure that you’re supporting the local and national economy and helping American families thrive financially, which in turn further stimulates the economy at all levels. Manufacturing currently provides some of the highest wages in the country for industrial workers. In fact, according to the U.S. Bureau of Labor Statistics, industries that specialize in producing goods paid an average salary of $56,799 per year—more than $10,000 above other popular working-class sectors such as healthcare or teaching.
Additionally, it’s not just manufacturing jobs that you’ll help create. In 2013, the American manufacturing industry employed about 12 million people, but it also helped create an additional 17.1 million ancillary jobs as well. U.S. manufacturing helps create jobs not only for the individuals who are manufacturing the components and products, but for those who are selling them, distributing them, and using them in other technologies.
Manufacturing is continuing to grow—gaining 1.1 million jobs since the Great Recession in 2008, and many manufacturers anticipate an additional 2% growth during 2018.
2. Reduced Cost for Deliveries
While locating manufacturing facilities abroad as a means of saving labor and production costs has traditionally been a common practice, the logistics costs involved with shipping products, materials, and/or components halfway around the world have climbed exponentially in recent years. When you choose to keep your manufacturing in the United States, you’ll save significantly on inbound and outbound delivery and shipping costs. While shipping products from overseas can be expensive, shipping domestically provides a range of transportation modes and broader shipping windows that can offer significant savings. Plus, by working with American delivery companies, you’ll eliminate the risk of miscommunication due to language barriers or currency differences, creating a much smaller margin for human error.
Using U.S. shipping providers also means that you’ll again be contributing to the national economy, and you’ll significantly reduce the amount of money you’re spending on shipment insurance, jet/ocean liner fuel, international taxes, customs fees, and more. By keeping shipping costs low, you’ll also be able to maintain product costs lower because you’ll have less overhead. Low prices keep customers loyal and more likely to buy again and again.
3. Shorter Lead Times
Not only does manufacturing in the U.S. save you money on logistics costs, but it also saves you valuable time in the production process. When goods have less distance to travel to get to their distributor or intended retailer, they can be delivered more quickly to the customer—accelerating the sales process, enabling more agile forecast responses, and getting money in your pocket sooner.
Having a shorter lead time is also a surefire way to increase customer satisfaction. Living in the digital age, customers have come to expect products to arrive within very short time frames. This is known as the Amazon Effect. Instead, shorter lead times will keep shipping costs lower for consumers, while still meeting the expectation that the product can be delivered on time.
To meet these nearly instantaneous demands, many companies who manufacture abroad must keep large inventory stores on hand in the United States anyway—which can end up being both costly and risky in terms of paying for storage space, labor to control/maintain inventory, as well as the chance that it could expire or become outdated before it sells. Manufacturing within the United States enables a push mentality instead of a pull mentality for an organization’s supply chain and increases the ability to successfully weather unexpected market shifts.
4. Environmentally Friendly
Cutting down on transit and delivery costs not only saves money but energy, making the U.S. manufacturing a much eco-friendlier option. Ocean shipping is one of the biggest emitters of greenhouse gases, and by cutting down on international shipping, your company will produce a much smaller carbon footprint. Customers want to feel good about the companies they purchase from, and many consumers will factor a company’s environmental standards into their purchasing decision.
When manufacturers are located abroad, however, customers sometimes have a hard time feeling connected to the place they’re doing business with. Some consumers may begin to wonder whether they’re conducting ethically sound and environmentally friendly business practices, making them less likely to buy products made overseas. In addition, the “maker movement” is currently taking storm across the nation, placing a greater emphasis on individual craftsmanship and local manufacturing that lead to greater environmental sustainability.
By manufacturing at home and lowering your overall energy consumption, you’ll be sure to grow your business.
5. A Higher Standard of Safety & Quality Control
By being geographically closer to your production facility, you’ll be able to execute tighter control over the manufacturing process, allowing you to ensure that all products fit set standards and specifications. If a problem should arise, you’ll be able to catch it and correct it more quickly—saving valuable time and money in the long run. Plus, you can be more confident that all materials being used in your facility adhere to safety and quality standards, as well—helping you make sure that you have the best building blocks on hand to manufacture your product.
U.S. manufacturing also allows you to enforce greater safety practices in your facilities to help protect your workers. Countries where manufacturing is commonly outsourced often do not have the same level of safety regulations that the United States has, which could put your employees at higher risk of injury while at work.
6. Homegrown Customer Service
Manufacturing isn’t the only part of your business that gains by keeping your company located on American soil. Customer service is an integral part of any company’s success, and it’s often majorly influenced by the geographic location of your customer service representatives. When customer service representatives and centers are located abroad, customers often feel a disconnect between themselves and the people handling their service issues. In addition, there can sometimes be language barriers that can cause miscommunication between representatives and customers, which can lead to problems and frustrations on both sides.
7. U.S. Manufacturers Pay U.S. Taxes
While offshoring has traditionally been a means to save on taxes, the benefits of reshoring or keeping operations in the United States should not be understated. By keeping your manufacturing firm in the United States, your taxes will support the community that you and your employees live in in terms of infrastructure, social programs, and more. Keeping manufacturing operations in America strengthens the United States’ economy and keeps our government’s financial system secure.
Together, these benefits present a solid case to keep manufacturing companies in the United States. While overseas manufacturing might seem like a cheaper option for many companies, in the long term, the benefits of keeping your manufacturing facility domestic far outweigh the short-term benefits of moving your facility abroad.
The Rodon Group is a family-owned and operated company that has been manufacturing on American soil since 1956. Supporting American manufacturers supports us all. To learn more about The Rodon Group’s made in America policy, click here.
Learn more about the hidden risks and costs in an offshore supply chain by downloading our whitepaper, Hidden Risks in an Offshore Supply Chain.