Executive Briefings

Companies, Small and Not So Small, Are Reshoring - Bringing Their Operations Back Home

Sleek Audio is part of a trend called reshoring, in which primarily small businesses decide that China is a hassle and that they want to bring their operations closer to home, where the recession has lowered costs, created workers eager for jobs, and made it easier to justify U.S. manufacturing. Reports have emerged from California, Texas and all across the country as small businesses -  and even large ones like GE and Caterpillar - take advantage of local incentives and move back at least some of their manufacturing operations for products sold in the U.S. market.

Sleek Audio's costs are about 15 percent to 20 percent higher because of the move back, but the company's redesign of earphones that replaced a formerly Chinese-made plastic component with U.S.-made high-end aluminum, titanium and special carbon fiber, resulted in a higher quality product that justifies the price. "Even though there's a tremendous cost savings when you go to China, in the end it really isn't that much," says co-founder Mark Krywko. "It's the hidden costs - the delays, the shipping costs, you pick all that up on a learning curve."

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Sleek Audio is part of a trend called reshoring, in which primarily small businesses decide that China is a hassle and that they want to bring their operations closer to home, where the recession has lowered costs, created workers eager for jobs, and made it easier to justify U.S. manufacturing. Reports have emerged from California, Texas and all across the country as small businesses -  and even large ones like GE and Caterpillar - take advantage of local incentives and move back at least some of their manufacturing operations for products sold in the U.S. market.

Sleek Audio's costs are about 15 percent to 20 percent higher because of the move back, but the company's redesign of earphones that replaced a formerly Chinese-made plastic component with U.S.-made high-end aluminum, titanium and special carbon fiber, resulted in a higher quality product that justifies the price. "Even though there's a tremendous cost savings when you go to China, in the end it really isn't that much," says co-founder Mark Krywko. "It's the hidden costs - the delays, the shipping costs, you pick all that up on a learning curve."

Read Full Article