Earlier, there were indications that manufacturers in the United States are returning to years of offshoring. More and more companies are taking steps to bring production closer to the customer.
A third of all American companies now plan to bring back production and services to the United States. This means that no less than 5% of the total procurement will be domestic again. A major shift for the American economy.
The following figures are available from the Grant Thornton Realities of Reshoring survey of 2013.
This shift will have a huge impact on the US economy. Macro economically as well as the trade balance, but also for local production companies, distribution and transport and service providers. Executives are more than ever busy re-examining their proposition, where not only costs but also the intangible costs of offshoring are evaluated.
As more information from the supply chain becomes more transparent through increasingly detailed information, it also becomes clear that many costs have been hidden. No longer the obvious wages and transport costs, but also the costs of loss of customers and inefficiencies in the chain due to difficult cooperation.
The extent to which suppliers are willing or able to share information can determine whether they are eligible to do business. They may require meetings together or face-to-face, and proximity to a supplier can be important to businesses. Certainly due to the increasing awareness of customers. [clothing – Bangladesh]
The proximity of a supplier can greatly reduce the [negative] impact on the lead time of service levels. A complete analysis should take into account the timely delivery of goods and materials, quality issues and the process of addressing any defects. A local supplier can resolve these issues immediately, and that creates a win / win for the supplier and the manufacturer.
Those bringing production back tend to use robotics and automation to design significant process improvements. The resourcing does not mean that the number of jobs will return to the same degree. Where previously 100 FTEs were required to staff a Call Center, now a company can achieve the same by half thanks to modern technology, social media.