Five Reasons Companies Are Reshore

Written by Small Business Magazine on February 22, 2016. Posted in Food packaging containers, Food packaging containers manufacturers, Plastic injection molding product

Reshoring

It has long been a practice for man American countries to have all manufacturing necessary for their product performed outside of the United States, using offshore label, as it became labeled. Recently, however, there has been a trend in manufacturing where these operations have been brought back to the country in a reshoring initiative. More jobs are available than have been in many years, making everything from drinkware products to plastic pharmaceutical containers. The reasons for reshoring are varied, but below are five of the most often cited.

  1. Closing Wage Gap: Wages in the nations where, traditionally, offshore manufacturing occurs have been increasing rapidly. China has made raising the minimum wage a priority, with the goal of a 15% raise to the minimum wage every year between 2010 and 2015. By contrast, America has only seen a modest rise in pay rates.
  2. Quality Control: When reshoring, companies often site quality as one of the main reasons behind the move. The poor quality they refer to comes both from the production line and damage acquired during transportation. In America, there is a larger skilled labor force, an allure that 70% of returning businesses named, allowing for the production of products with consistent quality.
  3. Counterfeit Goods :P rotecting intellectual property and the thriving market for counterfeit products has sent many companies back to American soil. Online, it is possible to buy a counterfeit of almost any product from makeup to movies, and this cuts into the bottom dollar for the companies making the genuine item.
  4. Shorter Supply Chain: The logistics behind shipping a product to markets around the world are complicated and responsible for a significant percentage of a company’s yearly expenditures. When the majority of buyers for a product are in the United States, there must be a significant gain to offshore manufacturing in order to justify the expense of getting the product to those that want to purchase it.
  5. Image: The importance of brand management can never be underestimated in American culture, and the “Made in” label on a product absolutely factors into that image. Items produced in the United States are perceived in general as being of higher quality in general and can command higher prices.

The trend of bringing manufacturing jobs back to the country has apparently only just begun. As more companies make this decision, it will provide more jobs to people that need them, who will then spend their money here, all leading to an increase in American economy as a whole. Given that, this is a trend everyone should encourage and applaud. Read more about this topic at this link.

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