Reshoring – Has globalization been put into reverse?

Precision machined components manufacturing returning

According to the International Monetary Fund “the current financial crisis has put globalization on hold, with capital flows reversing and global trade shrinking"

Last June, Forbes ran an article that asked “Is the Re-shoring of Manufacturing a Trend or a Trickle?”"Is the Re-shoring of Manufacturing a Trend or a Trickle"   

A skeptical author surveyed member companies of mfg.com with eye opening results. He found that 40% of the respondents had won new business for formerly outsourced production making him conclude that it was indeed a healthy trend.

That’s been our experience as well.

Customers are beginning to report that the cost of doing business overseas has risen to the point that the risks now outweigh the rewards. We are seeing previously outsourced parts returning to domestic production.

ReShorenow.org lists these 7 reasons why manufacturing is coming back to the U.S:

• Reduces Total Cost of Ownership
• Improves quality and consistency of inputs
• Reduces pipeline and surge inventory impact on just-in-time operations
• Clusters manufacturing near R&D facilities, enhancing innovation
• Reduces intellectual property and regulatory compliance risk
• Eliminates the waste and instability caused by offshoring
• Strengthens companies’ ability to respond quickly to customers' demands

If your firm is not reevaluating its total cost of procuring components from overseas vendors, it may be time to reconsider.

There is a free Total Cost of Ownership Estimator ™ tool available to help guide your initial study.  Access is available here. They contend that when price alone is the basis of outsourcing decisions a 20-30% miscalculation in the total cost of outsourcing results. 

When you have a handle on the true cost of your custom, precision screw machined parts and components, may we have the opportunity to earn your business and bring that production back home?

Reduce your total cost and eliminate the risks to your supply chain from overseas procurement. Take advantage of custom tailored inventory management programs that maximize your cash flow coupled with our and ongoing commitment to aerospace quality for everything we make. 

If you would like to know more, call us at 800-826-9985 or email me here for more information.

To your success in 2013,

Brett Hardman

Director of Sales and Marketing