As the COVID-19 pandemic continues to devastate global supply chains, many businesses have begun reshoring their operations. This trend is particularly prevalent in manufacturing, although reshoring rates have started to rise throughout the industrial sector in recent weeks. In fact, the Thomas Industrial Survey for April found that 64% of manufacturers are now considering reshoring, compared to only 54% who were thinking about reshoring in March.
Advancements in plastic injection molding technology allow manufacturers greater flexibility and sophistication in part design. At The Rodon Group, we are continually incorporating the newest technologies to remain on the cutting-edge of molding techniques in all sectors. This commitment to growth and innovation has allowed us to continue providing the highest-quality products to our customers.
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.
There are many risks involved in selecting an OEM suppliers. Understanding them is essential to running a successful business. In our white paper "Hidden Risks in Your Offshore Supply Chain", we’ll examine three strategic areas to include in your supplier selection process: Cost, Scheduling, and Compliance.
Cost
Cost is not just the final price you pay for a part. Cost also includes shipping, time to market delays, quality control checks as well as labor. Cheap foreign labor is becoming more expensive. Offshore suppliers face a more demanding workforce. And, today’s consumers are demanding that suppliers provide improved working conditions and pay. All of this is driving up the unit cost of goods sold.
This article written by Adam Robinson originally appeared on the Cerasis blog on June 24, 2015
Future Outlook of Reshoring in America
Jobs & The Slow Movement of Reshoring
Notwithstanding many sound reasons for reshoring, an Information Technology and Innovation Foundation report indicates that U.S. manufacturing is not experiencing a "renaissance". Industry experts conservatively acknowledge that off-shoring has slowed, and perhaps "stabilized". Although around 80,000 manufacturing jobs have come back to the U.S. in the past 3 years, (about 60% from China), per research by BCG and others, there's no indication that a great number of additional jobs will soon return from Mexico and China.
In fact, since the recession, more manufacturing companies have been lost than gained in the U.S. There were 10% fewer manufacturers in 2011 than in 2008—a record low since 1977, when the Census Bureau started collecting Business Dynamics data. And, the labor force was 35% smaller in those days. Manufacturing has gained 700,000 jobs since 2010. However, there are a million fewer manufacturing jobs than in 2008. Job gains are largely due to increasing consumer demand, not to reshoring production back to the U.S. Productivity in factories continues to improve, however, and are more efficient than ever, so the best jobs picture we can hope for is flat as we don't believe that US Manufacturing jobs will ever be at the percentage they were at the peak in the late 70s.
American vs. Overseas Manufacturing
There are many risks when it comes to selecting OEM suppliers. Understanding them is essential to running a successful business. In this article, we’ll examine the factors that impact scheduling and time-to-market when using an offshore supplier.
There are many factors that impact the total cost of goods purchased. On the surface, some offshore suppliers may seem cheaper. However, the true delivered cost is impacted by many variables. Using this overview, you should be able to better compare all of your supplier choices.
Shipping - This cost must be calculated accurately to determine the true “Cost of Ownership”.
Many companies fail to understand the full cost of shipping from China and other low wage countries. Depending on the contract, importers may be responsible for picking the goods up at the factory door. Many foreign manufacturers will include FOB (Free on board) shipping.
Factors to consider include:
FOB – This is the price paid by the manufacturer to get the goods to port. Depending on the contract this may be an inland port. Once on the carrier, the purchasing company pays for the remainder of the shipping costs to the final destination (s) as well as import duties and taxes. All of these charges need to be considered to assess total shipping costs. Having a FOB contract and terms will guarantee all parties know the extent of their financial responsibilities.
Time to market – There is also a cost to any delays that occur in receiving goods for sale. When commitments and time lines are not met, profit is lost. Once a delay occurs, to get merchandise to market in time, some manufacturers have used air freight to expedite the shipping. Air freight can be 10x more expensive than shipping by container which can erode margins quickly.
American Manufacturing and Products
This article written by Al Veres, the VP of Operations at SFEG, originally appeared on the SFEG.com website on January 9, 2015
Back in the late 70’s and early 80’s, the big push was to move manufacturing to Mexico. Then in the late 80’s and early 90’s, Asia became the new home for manufacturing. In each of these phases mega companies like GE, Siemens, GM, Ford were the early pioneers making the moves to manufacture outside the US. Smaller companies lagged behind and never felt the full benefits of being able to capitalize on low labor costs and having the advantage of beating their competitors.
All this has changed with the rising labor costs in China and high shipping costs that drive extreme lead times, coupled with large inventory carrying costs. I recall my boss, President of a large corporation, telling us that one day the pendulum will swing back in our direction. Here we are in 2015 and the pendulum is here. The flood gates have not opened entirely but the trickle effect is starting to happen.
American Manufacturing and Products
This article written by the Reshoring Initiative Editorial Team originally appeared on the Reshore Now blog on October 15, 2014
It is no secret that the last decade has brought a surge in demand for products made in the USA. But it was only recently we realized how much the “Buy American” movement has evolved.
In a recent survey conducted by American Certified, 1500 people across the nation were asked the question, “Other than price/ quality, what factor is most important to you when purchasing a product?”
