According to a survey earlier this year, 26% of the nation’s employers plan to reshore jobs by the end of 2014; companies from Apple to Ford to Walmart are once again investing in America, returning their business to U.S. soil.
The trend is known as reshoring, and it’s taking on momentum in a major way. While one of the reasons for it could be considered pure patriotism—and American consumers’ desire for Made in the USA products—there are substantial reasons, based on economics and logistics, that make reshoring highly preferable to outsourcing. Just ask the countless American manufacturers who sent business (and almost six million jobs) overseas between 1999 and 2009, only to find that it was far less profitable than they’d expected.
What many of these manufacturers realized the hard way is that outsourcing is fraught with problems. According to this article on how the practice went “horribly wrong,” many companies quickly found that outsourcing “changes the business model and introduces many challenges.” One of these many challenges—and ultimate problems—is the long, complex supply chain involved when a company outsources.
An international supply chain is very difficult to control and manage. Foreign subcontractors are far away, often have less experience, and can even be involved in major safety and human-rights violations. Any money saved was often ultimately lost when trying to fix the problems that occurred. The quality of products and services suffered greatly, as did many companies’ reputations.
Add to that the fact that American labor is now almost equally competitive, economically (check out this infographic), and you find that outsourcing just doesn’t make sense.
At Vanguard, we fully support the reshoring initiative. But we don’t take part in it—because we never outsourced in the first place. All of our products and parts are made here in the U.S.—unlike a good portion of the products made by our competitors—and we have always kept production here.
Many of our clients and the industries we serve, including the military, food, and medical industries, require domestic traceability, and we can provide that. And because we never sent work overseas, we’ve maintained expertise and won’t have to relearn production.
As our elastomeric molding and businesses continue to grow, we will continue to proudly make and sell American products. We applaud all of those manufacturers who are investing in America, and we look forward to seeing the reshoring trend continue.