Executive Briefings

Offshoring Has Lost Its Luster

Reshoring is delivering wide-ranging benefits for an increasing number of U.S. manufacturers, who see it as a way to maintain (or regain) global competitiveness. According to the Reshoring Initiative, in 2003 about 140,000 jobs were lost to offshoring. In 2014, for the first time in two decades, the U.S. realized a net gain of 10,000 reshored jobs.

You can expect to see more deep drawn reshoring in particular, because Boston Consulting Group predicts fabricated metal products will be one of the top sectors to benefit from this growing trend. In fact, the Reshoring Initiative says through 2014, 30 companies in this sector have already restored 1,721 jobs to American soil.

During the late 20th century, manufacturers saw financial salvation in moving production facilities overseas. They saw the lower cost of labor and processing, and at the time, lower material costs. But, as so many American manufacturers have seen, the lower price tag came at a cost.

Times have changed, and not just economically. Wages in Asia have risen dramatically in recent years, especially in China, reducing or virtually eliminating any cost advantage. Meanwhile, lengthy supply chains eat up time and expose companies to multiple vulnerabilities from inconsistent product quality to costly port slowdowns.

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You can expect to see more deep drawn reshoring in particular, because Boston Consulting Group predicts fabricated metal products will be one of the top sectors to benefit from this growing trend. In fact, the Reshoring Initiative says through 2014, 30 companies in this sector have already restored 1,721 jobs to American soil.

During the late 20th century, manufacturers saw financial salvation in moving production facilities overseas. They saw the lower cost of labor and processing, and at the time, lower material costs. But, as so many American manufacturers have seen, the lower price tag came at a cost.

Times have changed, and not just economically. Wages in Asia have risen dramatically in recent years, especially in China, reducing or virtually eliminating any cost advantage. Meanwhile, lengthy supply chains eat up time and expose companies to multiple vulnerabilities from inconsistent product quality to costly port slowdowns.

Read Full Article