An article from the Empire Group with this title appeared in January. The central thought is that former decisions to outsource certain functions, such as prototyping and “other manufacturing operations” are good candidates for reshoring consideration.
Proficient Sourcing LLC is a business that provides excellent performing candidates for OEMs’ outsourcing needs, so we could not agree more. And there’s good reason for this reshoring in many cases. As this article notes, “Even before the onset of the COVID-19 pandemic in 2020, reshoring was becoming more attractive to U.S. manufacturers because of the trade war with China, tax incentives, and a lack of transparency in supply chains. … What started as a move to lower costs has become a logistical nightmare rife with transportation delays, trade regulations and tariffs, intellectual property concerns, quality control, and business disruptions”.
“Because of the low labor and production costs offshoring provides, most manufacturers tolerate the additional transportation costs, complex logistics, and international tariffs associated with manufacturing overseas because they can be justified. However, in the past decade increases in the cost of fuel, shipping, and overseas labor, and, more recently, the COVID-19 pandemic, there has been a trend towards regionalization and localization in manufacturing”.
One look at the ships offshore waiting to unload at one port should lead to consideration of strategies to avoid such bottlenecks:
Among the many reasons outsourcing became popular, other than the obvious reduction in labor costs, have been asset exporting and relying on third parties for manufacturing expertise. Why manufacturing expertise was sought outside the US is a mystery to us. After all, the US was the world’s #1 manufacturer for about 100 years up until the past decade, and we are still a strong #2. So what expertise cannot be found domestically? In fact, most manufacturing functions are available domestically—easily. We’re here to help if you need some.
In particular, and in the absence of some special circumstance, using some domestic source for prototyping seems a much easier path to success. Proximity is extremely valuable when visits would be helpful, and exchanging ideas and project details can proceed without language or security issues.
Overall, speed is likely to be much improved via domestic manufacturing (not always, but usually). If one considers the time for shipping, unless something can be air shipped, that lag alone would surely offset any other speed advantage some foreign source might have.
We have had some experiences with prototypes for projects that involve design evolution. In such cases an initial design is prototyped, changed, re-prototyped, and so on. This could go on for several generations before the go is given for some rollout, or even a test market. An ideal circumstance would be for the OEM and prototyping source to be close enough that design people can be present for prototypes and exchange change ideas for product improvement. No language issues, tariffs, customs, container concerns, import inspections, product security, intellectual theft, or port delays are generally involved at all! These factors would seem to offset a great amount of unit cost.
If this strikes a cord with your situation, just consider the many capabilities we can offer. All these are domestic, although we have some contacts for global castings and forgings and a connection with a company that can offer alternatives in SE Asia for Chinese manufacturing. Almost all are long-standing companies with a history of happy customers. One company in particular has a wide array of capabilities for smaller parts, and is especially interested in prototypes. See the article below for more.
The good news is we can provide candidates for almost anything you need sourced in metals or plastic, and we can do so FAST. Just give us a call (513) 489-5252; we’re ready whenever you are.