There’s been a great deal of talk about American jobs that were lost when U.S. companies located manufacturing facilities in China, Mexico, and elsewhere to take advantage of cheap labor. Recently, however, several of these companies have announced that they are brining their manufacturing back to the United States. In fact, as reported in Industry Week Magazine, a recent study by the Boston Consulting Group (BCG) concludes that 37% of large, U.S. manufacturers they surveyed plan to reshore manufacturing. Another study of 319 companies by the Council of Supply Chain Management Professionals put the reshoring figure at 38%.
What is driving this trend to bring manufacturing back home? Economics, of course. The fact is, U.S. manufacturers have been steadily improving productivity by applying advanced technologies in the form of more efficient machine tools, smarter programming and control systems, and better process flow through robotics-based automation and automated pallet systems.
Meanwhile the costs of labor and benefits in China, for example, continue to rise as the population demands a better standard of living. According to the BCG study, China is experiencing annual increases of 15% to 20% in wages and benefits. Add to this the cost of transporting goods, concerns over political stability in many parts of the world, inadequate infrastructures and increasing concerns over intellectual property, and the U.S. once again looks like a very good place to manufacture products.
Another facet of the reshoring phenomenon is that companies who have been outsourcing their manufacturing to contractors in China and elsewhere are also doing the math and determining that using domestic CNC machine shops makes a lot of sense. This means that those shops that have embraced advanced manufacturing technologies have much to gain as the reshoring trend continues.
For more than 90 years Gosiger has been helping U.S. manufacturers become more productive and profitable by offering industry-leading machine tools, accessories, technical service and customer support. Contact Gosiger today for everything you need to take advantage of reshoring.