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By Zachary Smith |  January 13, 2016

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After a year of everyone clamoring over their reshoring efforts, all of a sudden the bell tolls due to the annual U.S. Reshoring Index from A.T. Kearney. The report finds that there is a drastic decrease in announced reshoring cases due to increased cases of offshoring and nearshoring, fluctuating strength of the U.S. dollar and oil prices, and a tightening U.S. labor market in manufacturing.

That said, this was an unexpected finding for the industry, and it has some manufacturers trying to strategize their next move. Here are some some facts about reshoring for you to consider when making decisions for your business.

Research and Development
There was a time when the U.S. was on the forefront of manufacturing exciting products in innovative ways. But to make exciting things, you need to do your research and be knee deep in the development process. Some of that magic and inspiration gets lost when manufacturing goes global, and even the government knows it. Did you know you could get a tax credit for R&D? You can, and you should.

An American Workforce
Here’s the thing. If you’re offshoring and utilizing a global supply chain, then you’re contributing to the skills gap. But if you start your R&D locally, interested workers will follow. Millennials will be attracted to innovation backed by a reliable industry. A new generation of workers will bring fresh new ideas. And with every new worker, manufacturing unemployment decreases and the skills gap closes.

Increased Productivity
If your employees and your ideas are local, then increased productivity follows suit. Output should increase from mass manufactured goods to custom projects. The more products completed, the more money comes into the business, and growth will follow. And up to this point, everything mentioned can be done in your own facilities, which additionally keep costs down.

Simpler Logistics
With all that increased output, you would have to spend a fortune on shipping in a global supply chain. With the exception of shipping products to a global customer base, shipping can become much simpler. Shorter distances to deliver products have plenty of benefits, ranging from less risk of damaged goods and shipment delays to avoiding confusion found in translations between cultures. 

Customer Satisfaction
The United States consumers are looking for products “Made In America” and are willing to pay for it. A Consumer Reports survey found that 8 out of 10 Americans would rather buy an American-made product than an imported one. The production and consumption of products manufactured in the United States helps our economy and instills a sense of social responsibility. And at the end of the day, happy customers make a happy business.

Big Companies Are Still Betting On Reshoring
Finally, some of the happiest businesses out there are bringing pieces of their business to the U.S; others are hauling the entire operation. From Ford to Boeing, the biggest names in manufacturing are bringing their supply chains to the U.S. Wal-Mart has continued their commitment in 2015 at their U.S. Manufacturing Summit, partnering with THOMASNET to help the vendors in their supply chain conduct business easier when operating under their “Made In USA” initiative. And not to say if everyone else is reshoring you should too, but as long as these industry giants are still investing in reshoring, we shouldn’t count it out.

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Topics: Manufacturing and Industrial

Zachary Smith

Zachary Smith

Zachary Smith is the Digital Marketing Associate at ThomasNet, where he assists in content development, email campaigns and social media management.

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