It’s no secret most companies’ put a lot of effort into improving the bottom-line by lowering the costs of what they make. For a couple of decades that has meant going outside the U.S. for manufacturing or buying stuff.
Today, when you hear people talking about the current movement to bring manufacturing back into the U.S. that is onshoring, it’s hard not to feel the sense of pride and the desire to save U.S. based jobs.
One of the main drivers of this trend is cost. According to an August 2011 report by BCG, Made in America—Again, “While American workers may cost more per hour than Chinese workers do, they put machines and automation to much greater use. U.S. productivity is about 3.4 times as much as it is in China. We now produce about 2.5 times as much goods in the U.S. as we did in 1971, with 30 percent less labor.”
Cost however, is only one factor that is driving this trend. Here are other critical dimensions to consider when onshoring your next project:
Innovation: The USA still is the land of the inventor, the entrepreneur, the place people are allowed to think outside-the-box. If you are looking to challenge status quo in your industry or recognize the need to offer innovative solutions to your customers, looking inside the U.S. borders is likely going to produce more creative, original, and innovative options for you.
Accountability: Let’s be honest, language barriers are one part of the, who said what when conversation. Yet, culturally, many places outside the U.S. just don’t place the same respect or responsibility for individuals to be accountable and therefore can’t understand why when there is a problem, they need to figure the causes so it can be fixed.
Cycle time: Many companies have learned the hard way that D x LB x TZD= CT (distance away X language barriers X time zone difference equals much longer cycle times to get stuff.) If your business depends on adapting to customer preference, responding quickly to changes, or managing market dynamics, the U.S. typically is going to get you things done much faster.
Safety: U.S. regulations often seem to be a competitive disadvantage, though when it comes to safety, they may be a secret weapon. Other countries low standards can increase risk and liabilities. As big a pain U.S. regulations might be a times, it does help insure you and your customers are getting the highest level of performance and lowest risk.
Quality: There was a time when it seemed the only thing that mattered was low cost. No longer are people willing to trade cost for quality. And Made in the U.S. once again often means the best quality.
IP protection: No other country offers the security and protection for intellectual property protection better than the U.S. Rarely does one read about sending your designs, engineering drawing, invention to a U.S. manufacture and then being ripped off. Elsewhere people almost expect their IP to be violated.
While today we live in a global economy where people do need to trade and partner between countries to remain competitive, the nature of buying things made in the U.S.A. has changed. There is pride in buying American made, but don’t overlook the other advantages to buying from U.S.A. made suppliers.