The Boston Consulting Group (BCG) is forecasting a major uptick in U.S. manufacturing. Key quote from their most recent study:
There are currently about 11.7 million manufacturing jobs in the U.S. - down from over 16 million in the late 1990s. To paraphrase our Vice President, adding 2-3 million manufacturing jobs would be a big "bad word" deal.
We first noticed companies starting to shift manufacturing back to the U.S. in 2007. Although the Great Recession slowed this shift, it's started to pick up again with the global economic recovery. By early 2010 it was clear this trend was real and would continue to grow in importance.
The drivers are:
- rising overseas production costs, particularly in China
- strong U.S. productivity
- rising transportation costs
- better understanding of the total costs of long supply chains
The last point is growing in importance and is nicely illustrated in the New York Times article A Company Grows, and Builds a Plant Back in the U.S.A. Key quote on long supply chains:
"The lead time for orders coming from China is three weeks, and all of our brewery clients want our products faster — that’s the first thing they say when we meet with them. ... Right now, we’re losing orders because of lead time."
A growing number of companies have this supply chain "need for speed." Also increasing is the number of products using shorter production runs and/or requiring customization. These shifts favor locating near sources of demand to cut product cycle times.
Add in the potential of supply disruptions and the environmental impact of long supply chains, and it's easy to see why manufacturing in the U.S. is becoming more popular.