There was a time in the late 90’s and early ’00s when it seemed like nothing would ever be manufactured in the USA again. It appeared that China and other low-cost labor nations would snap up every last manufactured widget from plastic medical devices to plastic car parts, from every last higher labor-cost nation in the world.
No longer. Reshoring is back in a big way.
Why? Two major factors: the Pandemic exposed supply-chain disruptions due to lockdowns, especially in China. Chinese workers simply weren’t allowed to work. Suddenly, American companies were without the widgets they needed to sell back in the USA and elsewhere.
But even if the Pandemic had never occurred, re-shoring would’ve begun to start happening anyway. Slowly, but inexorably, labor costs started rising as living standards improved over the past 20 years. American companies with production facilities in China and elsewhere took notice and began the reshoring of some processes as the competitive advantage of lower-cost labor began to dissipate.
But reshoring manufacturing, and specifically injection molds, calls for prudent planning. It’s vital to be certain you know the specifics of the molds being re-shored to avoid supply disruptions and unseen costs that could’ve been avoided with good research and communication.
For the overseas supplier, it’s critical to make sure you obtain all the tooling specifications, engineering files, as well as production and process data. It’s also vital that you have fully vetted the capabilities and capacity of the new domestic supplier(s) which is receiving the tooling and manufacturing information.
For example, do they have the right technical resources and documentation control? Do they have the proper-sized barrel-size, capacity and total tonnage on their molding machines? Do they have enough tooling resources to modify, support and repair production resources? For projects that have automation and other operations, does your supplier have the technical capabilities and resources to handle these operations?
However, if handled properly, reshoring can be profitable for suppliers, their employees and America, in general. In a nutshell, here are the main benefits of reshoring:
- Lower transportation costs to the U.S.
- Avoiding labor costs in foreign countries
- Greater responsiveness and flexibility with local American suppliers
- Reduced inventory cost by shortening the supply chain
- Risk of loss of control of intellectual property to foreign governments
- Unexpected supply disruptions due to government actions (think: lockdowns)
- Avoiding tariffs on imports
- High cost of rejects for quality concerns
- No communication/language problems with domestic suppliers
- No national security risks if the off-shored items are necessary for our health and defense.
- Made in the USA: More folks employed and their tax contributions to federal, state and local goverments