In the News
A January 2012 article titled ‘Reshoring’ gains momentum with U.S., KC manufacturers discusses the sourcing decision local manufacturers are making. Changing economic factors like rising Chinese wages, currency fluctuations, and the need for shorter supply chains are leading manufacturers to return production to the U.S.
Nathan Goodpasture, the director of business development at Pride Manufacturing in Liberty, MO says more than costs are sustaining the trend beyond the “Made in America” driver.
“We’re literally finding more opportunity for work than we can possibly handle right now, thanks to customers who would otherwise be in China,” Goodpasture said. “The prices have been rising incrementally overseas, and the spread is now getting small enough to where they are willing to pay a little extra to be in the U.S. It’s not just coming from the grass-roots, patriotic type of people who are torn about having anything in China at all, but from people who previously saw their business overseas as adding tremendous value. If it’s now only going to add a tiny bit of value, then they see it as not worth the costs and hassle.”
Those costs and hassles extend beyond a longer supply chain, and usually entail added business complexity stemming from communication and time differences. Hidden costs that often eliminate production savings are expedited shipping charges for late production, a disturbingly common problem after the initial order, and also unexpected travel expenses that arise to investigate and clear up quality and other issues.
One key for businesses to learn about potential opportunities is to develop their networks. By learning what capabilities surrounding businesses have, more parts of the manufacturing process can be reshored. This was the case when Whirlpool decided to return assembly of their hand mixers from China to their Ohio plant.
Small businesses in the area have a distinct advantage to join of the movement. Businesses with less than $100 million in sales cannot justify the expense to establish their own factory overseas and have their own staff on site to oversee operations. This is becoming a necessity to protect intellectual property and control the supply chain.
The region’s central location provides a logistical advantage to pursue manufacturing opportunities across the nation. Freight can be delivered to
The strong work ethic and manufacturing background of the Project 17 region, along with these factors, make reshoring an attractive opportunity for growth.
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