Manufacturing Boomerangs Back To the U.S.

Article in the Wisconsin Small Business Times discussing manufacturing moving back to the U.S. from China and other place overseas.  Quote on the manufacturing boomerang trend:

"Select manufacturers in old-line industries such as investment casting, injection molding, precision machining and tool-and-die making are routinely taking business away from their Chinese competitors."

The companies profiled in this article are using technology and automation to cut production costs, increase their flexibility and speed up their product development and delivery times.  For example Signicast, who make metal components and castings, focuses on speed and flexibility.  From the article:

"Signicast’s use of automation and the four different manufacturing modules enable the company to respond quickly to new orders and to requests for changes. That speed and flexibility give Signicast a significant edge over foreign competitors.

"“Speed is everything, and it’s one thing that China can never do,” McDonald said. “Quality is one thing they can improve on. But we can, from conception, to tool up to approval, have a product run in less than nine weeks now. In China, lead time is more like 20 or 30 weeks once they have the tool built.”

Reich Tool and Design is also profiled.  They are using a niche market strategy:

"Instead of trying to compete on price, Reich Tool & Design Inc., a tool-and-die manufacturer based in Menomonee Falls, is working to develop niche manufacturing capabilities in aerospace, medical and energy exploration - areas it believes that Chinese manufacturers cannot compete."

A third company discussed in the article, Plastic Components, uses a low cost strategy:

“Our tag line is, ‘Low Cost at Home,’” Duffey said. “We try to tell people to change their mindset, that they don’t have to go to the Third World to buy parts at competitive prices. They can get them in Germantown, Wis.”

Despite the boomerang effect the majority of off-shore manufacturing is not going to come back to the U.S. But rising overseas labor and transportation costs, coupled with increased domestic use of automation and technology, is making U.S. manufacturing increasingly cost competitive.  Add to that strategies built around niche markets, customization, flexible systems and delivery speed and a number of U.S. manufacturing sectors are effectively competing with overseas competition.

I saw this on the MFGx blog. 

Comments

[Theo Tuerke]

I could go on for pages about manufacturing in the U.S. verses overseas. There many niches where manufacturing at home is a better option. Bringing manufacturing back to the U.S. would the best economic stimlus we could have.
I believe that so often the huge amounts of rules and regs as well are our corporate tax structures cause many business owners to manufacture over seas to simplify their business models and lower costs. If the tax code and regulations were simplified this would fuel the return of manufacturing to the U.S. but there are still plenty of opprotunies especially with increased costs of shipping, long turn around times, and some cases the merchandise are more likely to get lost or stolen, local manufacturing can be often the best option especially for the small business owner.
I design and assemble my art jewelry locally and even make components whenever possible and I want to be able to provide jobs for a few people myself. As your article points out I can provide my customers services many large businesses would not want to do such as vintage and sentimental jewelry repair most jewelrs don't want to do for example.

[AJ]

Thanks for the nod. I love your work here - keep it up.