PD&D Executive Editor David Mantey recently published the article “Is It Possible to Bring Manufacturing Back to the U.S.?” The article offers some good insight on the reshoring debate, as well as some common misinterpretation of the subject.
Mr. Mantey and his subject Mr. Young acknowledge that reshoring, or not offshoring, has become a viable alternative in the consciousness of the business world. They point to some of the drivers of the trend: the shrinking wage gap, which allows other factors such as relative worker productivity, labor laws, transportation costs, infrastructure, clustering, tax and regulation – to carry more weight when it comes to sourcing decisions. Those factors mentioned include just a few of the “hidden” costs associated with offshoring. In order to make informed sourcing decisions it is more important than ever for companies to use a total cost of ownership analysis, which accounts for all associated costs, not just landed cost.
In response to the question the article’s title poses: Yes, manufacturing is already coming back to the U.S. The actual rate of reshoring is greater than implied in the article. Approximately 50,000 manufacturing jobs have been reshored in the last three years, 10% of the total increase in manufacturing jobs. The number of companies that have reshored is much greater: at least 200 OEMs (more than double what was quoted from the Economist.) In addition, MFG.com’s surveys and the structure of U.S. manufacturing suggest that thousands of domestic suppliers have benefited from the 200 OEM’s reshoring decisions.
Read the rest here: http://www.pddnet.com/blogs/2013/06/yes-manufacturing-back-us