In recent years, the “reshoring” of jobs back to the U.S. has gathered momentum. Because of this, the current trend is overturning the loss of manufacturing and its associated jobs to countries like China, Brazil, and India.
Below are a few of the main reasons of what is driving reshoring.
1. Automated Production
Replacement of overseas workers with automated factory robots in the U.S. is becoming more cost effective than ever before. In addition, jobs in departments that are complimentary to production are being created due to these technologies.
2. Rising Shipping Costs
One of the main reasons for the surge in outsourcing overseas was due to the lower-based wage costs. But this is only beneficial if it offsets other costs like shipping and handling. The rise in shipping and handling costs has dissolved some of the low-wage costs benefits.
3. Less Labor-Intensive Production
In recent years advanced manufacturing techniques, such as 3D printing, have allowed for some manufacturing to be less labor-intensive. Parts can run for extended periods of time without anyone needed to oversee the build. In some instances, some parts can be removed from the 3D printer and applied to its process with little to no secondary work.
4. Soaring Outsource Wages
In recent years, the wages for most factory works in previously low-cost countries has greatly increased. While this is beneficial to these workers and the class structure in these countries, the costs of the products produced also increases. The overseas costs may be very similar to costs within the home country, thus losing some of the lower cost luster.
5.Logistic Lead Time
Large shipments of goods that take weeks to cross the oceans. The lead time for shipments can take longer due to unforeseen circumstances, such as customs or adverse weather. Product innovation can suffer due to the distance between the operations of the manufacturing process. Working with vendors close to home can allow better communication and efficiency for all stages of the manufacturing process.