The New York Times has a write up discussing the resurgence of American manufacturing and the moving of manufacturing and production facilities back to stateside.
The Covid-19 pandemic has had major repercussions on the world’s manufacturing and supply chain, causing long lead times and high prices as demand soars for limited supply. With these issues, the idea of onshoring or reshoring has gained much traction.
Onshoring or reshoring is the process of moving one’s manufacturing output back to the states from a foreign nation. While the goal would be to have a product assembled from start to finish, reshoring for now can help with the assembly of essential parts, or part of the overall final product to be assembled elsewhere.
The benefit of moving production facilities stateside is it allows for more control over the build process as well as shortening lead times. The ability to interact with and check on the assembly leads to better quality. Financially, the ability to quickly get your product out the door or part into the next phase of production means a quicker return on your investment.
Large companies are looking to make investments reshoring to stateside, the article noting,
“General Motors disclosed in December that it was considering spending upward of $4 billion to expand electric vehicle and battery production in Michigan. Just days later, Toyota announced plans for a $1.3 billion battery plant in North Carolina that will employ 1,750 people.”
Additionally, investments in memory chip manufacturing and research and development as well as semiconductor chip manufacturing will lead to stateside part sources.
The Covid-19 pandemic has accelerated the need to relocate manufacturing. Having been overly dependent on foreign labor, delays at the ports as well as shipping delays and high freight costs, moving part of or a products assembly can be the difference of a months to a year in releasing a product. Moving production near the consumers makes for a smoother product release.
Tim Ingle, group vice president for enterprise strategy at Toyota Motor North America on reshoring, “It’s absolutely about being close to the customers,” adding, “It’s a big endeavor, but it’s the future.”
Reshoring manufacturing doesn’t only impact the consumer but also the worker. The return of manufacturing jobs stateside means people can have good jobs, making more than one could serving or working part time in retail.
American Knits, an American textile mill located in Swainsboro, GA, uses local cotton to manufacture clothing. Opened in 2019, American Knits believes moving manufacturing back to the states can be done, noting “America Knits shows it can be done and has been done.” With 65 employees currently producing their line of premium t-shirts, they expect to soon increase their labor force to around 100 employees as business grows.
Where a product may cost more being manufactured stateside, that money goes towards its employees and crafting of better product that last longer. Some increased expenses are also mitigated through the loss of other costs.
At Intellitec, we believe localized, stateside manufacturing is important. While there can be some negatives, mainly increased cost, the positives greatly outweigh the negatives. Some to note are shortened lead times, more control of the build quality, the ability to interact with a person face to face, and standardized processes. Located in Central Florida’s manufacturing technology corridor, we form partnerships with out clients, not just trying to build a product and ship it but ensuring the best product possible is delivered. This means working with the client to fix design flaws or recommendation of better techniques to make the build simpler.
For more on Intellitec’s philosophy and manufacturing capabilities, check out our manufacturing website.
Sources
Schwartz, Nelson D. “Supply Chain Woes Prompt a New Push to Revive U.S. Factories – The New York Times.” The New York Times – Breaking News, US News, World News and Videos, 5 Jan. 2022, https://www.nytimes.com/2022/01/05/business/economy/supply-chain-reshoring-us-manufacturing.html.