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The Reshoring Option: Maybe it’s Time

Bringing production back has its own set of challenges


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The common perception is that manufacturing jobs left the U.S. decades ago for low-cost labor overseas, and the country has settled into its international role as a service economy. Actually, government data shows the high point in manufacturing jobs was in 1978, with levels remaining steady as late as 2000, followed by a decline in the number of jobs as well as the sector’s percentage of the total economy. Although we are settled into the build-it overseas paradigm, a number of factors are causing U.S. manufacturers to consider moving production back home.

Companies receive a lot of fanfare when they move manufacturing back home, and there is definitely evidence that this transition, termed Reshoring production (“Reshoring”) is increasing. A non-profit organization, the Reshoring Initiative, estimates that 80,000 jobs have been added to the U.S. since 2010 through Reshoring, providing a job multiplier effect equivalent to 160,000 jobs.

Apple, General Electric, Google, and a growing number of other companies have brought some level of production back to the United States, but, at this point, the reality is that the transition is more of a trickle than a torrent. While companies add production in the improving economy, they still continue to add production overseas. A survey by the Boston Consulting Group released in late 2013 found that most large U.S. companies plan to move some production from China back to America, or are considering it. There’s enough logic behind Reshoring to make it a bona fide trend that could result in a long-term balancing of the supply chain.

Explore drivers of this hot trend and learn challenges and opportunities companies may face in Reshoring.

 

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