Bringing Jobs Home: The Benefits of Reshoring

Here’s a scary number…according to the nonprofit organization Reshoring Initiative, the United States lost 220,000 manufacturing jobs per year to Asia, Latin America, and Africa between 2000 and 2007. That’s over 1.5 million jobs. 1.5 million people without work. The U.S.’s manufacturing industry was on its way to complete extinction.

In today’s globally competitive marketplace, it is no secret that keeping costs down is important to all manufacturing companies. So, of course, total cost is going to be a key factor in deciding whether to keep manufacturing at home or to outsource overseas. It seems that the collective thinking of the American manufacturing industry is that sending manufacturing jobs overseas is simply cheaper. The labor is cheaper, the infrastructure is cheaper, and the materials are cheaper. The currency exchange may be favorable as well.

While it might seem like the move comes at a significant monetary cost, the truth is that bringing it back reduces the total cost of ownership- the total of all direct and indirect costs of a product or system. In the case of the manufacturing world, it goes far beyond the time and cost of creating one unit of your product. It accounts for things such as transportation, inventory costs and control, quality control, supply chain risks, energy, and productivity. It goes much deeper than the final price tag. Enter the Reshoring Initiative. What exactly is “reshoring”? Reshoring is the practice of bringing those manufacturing jobs back to the US from overseas, with the Reshoring Initiative spearheading the movement. The idea is to change that collective thinking from “it’s cheaper to manufacture overseas” to “local decreases the total cost of ownership”. According to the Reshoring Initiative, since the manufacturing employment low in 2010, 265,000 manufacturing jobs had been brought back to the U.S. by July 2016. And that number continues to rise as more and more companies adopt this new way of thinking.

According to Forbes, many huge, household names have taken on the efforts of reshoring, including Boeing, Microsoft, J. Crew, and Ethan Allen, just to name a few. Industries that were all but extinct in the United States have made a comeback as well, such as bicycle and textile production. Not only have jobs been brought back, but new U.S.-based production companies have been created that just years ago would have been outsourced to China or another off-shore location.

The thing is though…reshoring does so much more good than simply lowering the total cost of ownership. Companies are finding that they seeing higher product quality and faster delivery times. Another benefit is that companies are better able to adapt to their clients’ ever-changing needs and demands.

Looking at the big picture, though, bringing manufacturing jobs back to US soil is a sure-fire way to strengthen our economy. When the manufacturing jobs are brought back, it creates a ripple effect, increasing the sales of local suppliers, the utilization of local transportation, and putting money in the pockets of local workers. But it doesn’t stop there. Reshoring also fosters a skilled workforce, provides higher wage jobs, and provides higher quality products and services.

Is that where it stops? Not at all. Those higher quality products and services are making the company money. The company expands, and requires more skilled workers and more infrastructure. They need people to build and maintain that infrastructure. Their workers need food, housing, and other goods. Because they are skilled workers and making a higher wage, they have money to spend on other industries. And it goes on, and on, and on.

See what I mean? The unstoppable ripple effect of Reshoring.

It’s time that we start seeing “Made in America” stickers on more products. It’s time we produce quality products that are locally sourced. And it’s time we take more pride in American manufacturing. With constant innovation, and the most cutting-edge technology, American manufacturing is more efficient, and producing higher quality products, than ever. Our strength will come from within, but it all starts with bringing those jobs home.

That is, and always will be, the mission of Custom Design. By creating customized manufacturing systems for fabrication facilities in the U.S., we can and will reduce the total cost of ownership, reduce waste, and help you build a better product.

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