01.16.19 // Heritage Paper
Reshoring, Onshoring, near shoring – whatever you call it, the news that manufacturing jobs are coming back to America is the good news story of the day.
Since 2010 jobs have been coming back to US slowly but surely. That year marked the lowest level of employment in the manufacturing sector. Since then, over 576,000 jobs have been created either by onshoring or by foreign direct investment (FDI). In fact, in 2017, reshoring and FDI accounted for 90% of the manufacturing jobs created that year (Source Reshorenow.org)
Certainly, the low wages offered by overseas locations were a primary motivation to move offshore in the first place. But over time, businesses have learned that the total cost of doing business offshore is much higher than first expected. Quality issues, freight costs, concerns of supply chain custody, dubious practices and costly management oversight all contribute to a higher overall total cost than first anticipated.
Other factors driving this trend include the clear momentum that is gaining from societal pressure to adopt sustainable strategies, respect the global environment and to give back to the community the businesses are serving.
And, Walmart’s $250Billion initiative to source American made goods confirms the consumers’ desire to buy American and provides a clear incentive to rethink off shore strategies.
Most of the manufacturing operations coming back to America will offset some costs by replacing the low labor costs from China (as an example) with our higher skilled workforce and automated processes.
We have installed several complete turnkey automation systems for businesses that have returned these jobs and profits back home. While the equipment automation is certainly a big part of the solution, packaging redesign may also play a role in cost reduction and productivity output. For example, redesigning to eliminate excess assembly costs, or to reduce excess packaging that was necessary due to inferior materials, or to reconfigure case/pallet counts designed for overseas transit but can now recoup costs and maximize space utilization.
So if you’re considering bringing back some of your manufacturing operations, contact us to see how we can help you find the cost savings you need to help make reshoring a reality for your business.