Companies Looking to Manufacture in America

After years of outsourcing jobs to foreign countries, some American manufacturing companies are now looking to open plants in the United States. This practice, known as reshoring, has benefits for both American manufacturing companies and American workers. The manufacturing companies can take advantage of lower transportation costs, while American workers enjoy an increased number of job opportunities in the manufacturing industry. Although reshoring has many benefits, it has some associated challenges as well.

Joel Hans of Manufacturing.net interviewed Narayan Laksham, the CEO of Ultriva, about the trend of reshoring manufacturing jobs. Laksham said moving operations overseas made sense when American manufacturing companies focused on batch-oriented processes. Because consumers want so many products, American manufacturing companies are now dealing with thousands of different parts. This makes overseas manufacturing more costly than it used to be. Contract manufacturing companies are also feeling the sting of rising costs, forcing them to consider better ways to manufacture goods.

Apple is one of the most notable American manufacturing companies moving some of its production back to the United States. In December 2012, company representatives announced that Apple would be making a line of Macintosh computers in a U.S. production facility. The working conditions at Foxconn, the overseas manufacturing company that produces the iPhone and iPad, have been somewhat of a public relations nightmare for Apple. Rising costs, combined with the need to improve public perception of the electronics retailer, make reshoring a good choice for the company.

Antonio Regalado of "MIT Technology Review" reports on a 2012 MIT study that found 14 percent of American manufacturing companies plan to move some of their production back to the United States. Representatives from Wham-O, Michigan Ladder, and General Electric say they have moved some of their manufacturing back home. The low labor costs in China had prompted many American manufacturing companies to move their production facilities overseas. What company executives did not expect, however, is that quality problems and increased shipping rates would have such an effect on production. Some additional costs are also associated with manufacturing products so far from company headquarters. Harry Moser, head of the Reshoring Initiative, says that wages in China also double every four years. All these factors make overseas manufacturing more costly than expected, both for contract manufacturing companies and for companies that produce their own goods.

As a manufacturing professional, you must be aware of changing trends in your field. Reshoring is a trend gaining financial and political traction, and American consumers are clamoring for goods made in the United States. American manufacturing companies will have to meet this demand to stay competitive. Reshoring can also help American manufacturing companies reduce intangible costs and avoid the stigma of shipping American jobs overseas.

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