Reshoring manufacturing jobs back to the United States has been a hot topic in the industry for the past few years. The question is, why should your company consider it? Some might argue that it’s a matter of patriotism; others argue it’s a simple matter of economics – manufacturers want to bring production closer to the actual consumers of their products. 

Material Handling & Logistics’ author Pierfrancesco Manenti, VP of research at SCM World, believes the former. Manenti says the time is perfect for this transition, as labor costs – historically the driving force behind off-shoring – have risen rapidly over the past few years in traditionally low-cost countries, and there have been significant strides in automation technologies in the United States, which helps to lower costs domestically or near-domestically.

With labor costs no longer providing a strong business case for off-shoring, manufacturers are beginning to focus more on issues related to customer service, including response time and agility. These considerations are leading to re-shoring, and are cause for many manufacturers to consider local-for-local manufacturing.

Under local-for-local manufacturing, sites are selected based upon geography so that a production facility can better serve a specific region of the company’s customer base. As such, more facilities might be utilized for production as opposed to having a single larger facility for all production. Companies are then able to secure short lead times and provide better customer service.

It remains to be seen whether the local-for-local trend will stick around long-term, but it’s certainly an economically viable contender in the world of manufacturing strategies.