Reshoring is underway. Forty percent of manufacturers have moved their operations back to America from China and India, according to a 2012 academic study sponsored by the Council of Supply Chain Management Professionals.
“Going overseas is not the panacea that it was thought of just a decade or so ago,” said Tobias Schoenherr, assistant professor in MSU’s top-ranked Department of Supply Chain Management.
“Companies have realized the challenges and thus are moving back to the United States,” the study co-author said.
He said the respondents – involving 319 manufacturers – cited labor costs, oil prices, transportation costs, political instability and other reasons.
Other factors included the attrition of intellectual property as well as poor product quality.
Those are challenging problems exacerbated by differences in time zones, languages and cultures.
The reshoring trend includes aerospace and defense; industrial parts and equipment; electronics; and medical and surgical supplies.
“We were surprised by the large percentage of firms indicating that they are considering reshoring,” said the researcher.
Thirty-eight percent of respondents explained that their competitors have also brought back jobs.
More good news:
“From my communication with some firms, I also sense a genuine desire to help the U.S. economy and to bring back jobs,” he added.
Other study co-authors: Wendy Tate and Kenneth Petersen of the University of Tennessee and Lisa Ellram of Miami University (Ohio).
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“The American consumer is also the American worker, and if we don’t do something to protect our manufacturing base here at home, it is going to be hard to buy any retail goods.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.
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