Re-Shoring Manufacturing For American Companies Now Has A Bigger Appeal Than Ever
Call it re-stabilizing, re-balancing or simply re-shoring. It is the concept of bringing manufacturing jobs back to the United States and companies are pleased with the outcome of doing so. For the nation, re-shoring brings back desirable jobs that have been lost to decades of off shoring. Businesses that have turned to countries for cheap labor have realized that labor isn’t the only thing they are paying for and that doing business overseas is more trouble than it’s worth.
First off, average wages in China have jumped 10 percent to 25 percent a year, hitting $4 to $6 an hour in some plants. Add in shipping and high fuel costs, and off shore manufacturing is no longer such a bargain.
Take for example the Minnesota company, Calibur11 that brought back the manufacturing of its’ gaming console protection kits to American soil because of the hassle they had dealing with China. Commissioner of the Minnesota Department of Employment and Economic Development said, “when you are dealing across the ocean, there are logistical issues and language issues and it’s not perfect overseas”. There are many reasons to bring manufacturing back to the states and one of the biggest supporters of the concept is Harry Moser, the founder of the “Re-shoring Initiative”.
The mission of the Re-shoring Initiative is to bring good, well-paying manufacturing jobs back to the United States by assisting companies to more accurately assess their total cost of offshoring, and shift collective thinking from ‘offshoring is cheaper’ to ‘local reduces the total cost of ownership.’
Some companies have never outsourced their manufacturing to other countries and they have their reasons for doing so. The upholstered furniture company Southern Motion didn’t see the cost reduction opportunities that a lot of companies thought they’d have going overseas. The furniture industry tends to import pre-made fabric kits but Southern Motion stitches everything in house. Leather and fabric kits need to be inspected and genuinely cared for and there are some parts of the kit that cannot be used. CEO of Southern Motion said relying on his own workers ensures quality of the product and allows flexibility that otherwise can’t be found by relying on work done offshore. Read more: djournal.com – ‘Reshoring’ could boost US manufacturing
So many companies focus on rudimentary costs, not the whole cost, which can add 20 to 30 percent,” said Moser. You may have improved margin by offshoring but your quality may have worsened and your overhead costs may be higher.
Follow Harry Moser on Twitter and support the re-shoring initiative while I leave you with his top reasons on how re-shoring benefits the companies in our nation and the nation as a whole.
- Brings jobs back to the U.S.
- Helps balance U.S., state and local budgets
- Motivates recruits to enter the skilled manufacturing workforce
- Strengthens the defense industrial base
- Strengthens companies’ ability to respond quickly to customers’ demands
- Improves quality and consistency of inputs
- Eliminates the waste and instability caused by offshoring