Offshoring decimated U.S. manufacturing, but technological and economic changes combined with advanced robotics are shepherding the opposite trend — reshoring.
A growing number of U.S.-based factories are using advanced robots — cheaper, smarter and more flexible — to produce goods in the U.S. faster and of higher quality compared with Chinese factories, some say.
Companies that bring manufacturing back to the U.S. or that forego outsourcing for new manufacturing in-country are even undercutting Chinese prices on some products, some observers say.
A 2014 poll of U.S. manufacturers with sales of at least $1 billion conducted by Boston Consulting Group found that 54% of companies are considering bringing production back from China, up from 37% just 18 months prior.
Executives see real advantages in reshoring, says Chad Moutray, chief economist for the National Association of Manufacturers.
“Yes, it’s a nice thing to do for the country,” Moutray said. “And corporations want to be patriotic when they can.
“But at the end of the day, the numbers (behind reshoring) have to work” for any initiative. He says some companies have found that reshoring makes financial sense.
One key to making it work, he says, is the use of robotics and other advanced manufacturing. And this has been a trend.
Going back to the mid-1990s, Ford (NYSE:F) “had a quasi-lights-out facility,” one largely run by robots, says Tucker Marion, professor of technological entrepreneurship at Northeastern University.
Marty Linn, principal engineer for the robotics unit at General Motors (NYSE:GM), says the company is using multiple automation systems, including new collaborative robots, as part of ongoing strategic advanced manufacturing initiatives.
GM wants better control of costs, manufacturing flexibility and safety, Linn said, listing top factors that other companies cite as reasons for reshoring using advanced robotics. GM itself is not reshoring — it already does virtually of its manufacturing in the U.S. and other markets where it sells cars — but Linn says he can see a day when GM will bring job-shopped work in-house using advanced systems.
The reshoring trend can be found in Apple ‘s (NASDAQ:AAPL) 2013 decision to build its Mac Pro desktop computer in Austin, Texas, in an advanced-manufacturing facility owned and operated by Singapore-based contract manufacturer Flextronics (NASDAQ:FLEX). Apple typically has sent such work overseas.
Other companies, including General Electric (NYSE:GE) and Philips (NYSE:PHG), also have retooled plants to take work previously done in China.
GE brought water-heater and some refrigerator manufacturing home in 2012. Philips brought its higher-margin electric razors back to its home country, The Netherlands, three years ago.
Source Article from http://news.investors.com/technology/070215-759912-reshoring-trends-brings-back-more-us-manufacturing-jobs.htm
