In the early 1970’s GE CEO Jack Welch started moving some operations to overseas factories with lower costs of production. Offshoring continued for decades (and still does), but really began to pick up speed in the 2000s as the internet removed technological barriers and made it easier to deal with foreign operations.
Today, however, a new trend is emerging. As regulations change and labor costs start to increase, many companies are starting to see the advantage in using US manufacturers to complete work formerly done in countries like China.
The following describes five reasons to invest in US manufacturing.
Reason #1: Ease of Communication
Though technology allows you to quickly send an email to check status on your work, getting in touch with overseas workers may not be as easy as you think.
First, there is a significant time difference. When you’re at work wondering what the status of your project is, your point of contact is probably sleeping. Sending an email or calling isn’t likely to get you an immediate response.
Language barriers can sometimes be difficult to navigate as well.
Reason #2: Less Paperwork
Overseas shipping requires lots of complicated paperwork. The documents required depend on the destination country, which in most cases would be the US.
Bills of lading, detailed packing receipts, bureaucratic customs paperwork and special labels are just a few of the headaches you have to prepare yourself for when dealing with international suppliers.
Reason #3: Simpler Logistics
Depending on your purchase, many US-produced goods can easily be sent via a number of methods. Wait times are shorter, and if anything happens, problems are usually resolved much faster. Your overseas shipment could be stuck on a dock in customs for months before it ever makes its way to you.
Reason #4: Advertising Advantages
According to Consumer Reports, 80% of customers prefer to buy good produced domestically. Many will even pay more for them. This allows you to recoup costs by charging a higher price for goods with the Made in the USA label or stamp.
Reason #5: Comparable Costs
Though overseas labor costs are low compared to the United States, they are rising. While they are nowhere near US levels, these rising labor costs combined with increased transportation costs make offshoring less profitable than in the past.