Reshoring is a good thing and is often less expensive than manufacturing overseas.
Reshoring is the act of reintroducing domestic manufacturing to a country. It is the reverse process of offshoring, where manufacturing is moved to another country where labor is cheaper.
Manufacturing Overseas includes Hidden Fees
When companies decide to offshore production, they often simply seek the lowest initial price per unit. If they were required to take into account the hidden costs of foreign production, U.S.-made goods would become more cost-competitive.
Manufacturing Overseas is Risky
Manufacturing overseas carries dozens of uncounted expenses and consequences. Companies often don’t weigh costs for transportation, as well as expenses for dealing with reduced product reliability, undependable supply chains and the need to hold more inventory in case overseas deliveries are delayed. For instance think what natural disasters can do on the other side of the globe to disrupt the supply chain and slow delivery to a crawl.
Reshoring Carries a Higher Value
Additionally, reshoring makes sense as the labor wages in China and other members of the “BRIC” nations continue to rise while transportation costs continue to rise. Coupled with that, once you add the quality label appeal that “Made in the USA” gives the consumer, there is increasingly less reason to look outside our boundaries for any manufacturing.
A TCO (Total Cost of Ownership) comparison is the best way to make sure you are looking at the whole picture and, inevitably, reshoring is the answer.
JBE specializes in reshoring initiatives and is committed to providing local workers a good wage and produce the highest quality assemblies for our customers.