4 Reasons It’s Time to Onshore Manufacturing
For years, manufacturers have been offshoring—going overseas with at least some of their manufacturing to remain competitive. But that has changed. Due to economic advantages and concerns about quality and supply chain issues, many manufacturers are returning operations to the US. Is this a good idea for your company? And if so, what will it take to make it happen? This blog series discusses both.
Part 1: Offshoring is a thing of the past: 4 reasons to onshore
There are many reasons—from economic to logistical to quality and control—that you should consider onshoring:
Reason #1: Offshoring isn’t necessarily more cost effective
Countries like China perform much of the offshore manufacturing, but employees demand better pay and benefits even in third-world countries. In addition, fuel and other costs involved in the supply chain affect profit margins. It is worth comparing costs to see if it might be cheaper to reshore or nearshore all or part of your operations.
Reason #2: It’s a question of quality
It’s a common news story: Products of sub-standard quality being recalled. This is a continuing—if not growing—concern with offshoring. At best, poor quality products cause customer satisfaction issues; at worst, they can cause injury or death—putting your company at great risk. While issues tend to be with tier 3 and 4 companies (those that supply sub-components to tier 1 and 2 manufacturers) and revolve around capacity, it is still a real concern. Is it worth taking the chance to save money?
Reason #3: Time is money
What do you think customers want? Cheaper or faster? This is a serious question because offshoring can add weeks to delivery time. Also, remember that some manufacturers require payment from you when the goods leave their facility—which can create cash flow issues for you.
Reason #4: Made locally
Many consumers want to buy products made in their country to support the economy and because they feel more confident in the quality. Depending on your customer base, this could be a huge competitive advantage.
One final note
Still not sure? Learn why you should consider reshoring and how you can do it. Download our eBook, Reshoring Your Manufacturing Operations: Is It Time…and Are You Ready?
