Reshoring brings manufacturing jobs back to the US

Many American manufacturing companies are bringing production back to the U.S., which is creating more manufacturing jobs stateside. For years, American companies moved much of their production to countries with low production costs like China, but as labor and shipping costs in these areas have risen, reshoring has become more attractive, according to Firms bringing production back to the U.S. may want to consult a manufacturing recruiter to locate new talent.

In addition to increased costs from foreign production, the time between production and sale of goods in the U.S. is much longer, Global Sources stated. Reshoring allows companies to fill orders flexibly and have greater control over quality. Businesses can ship orders to suppliers much quicker if production is located near the market for the product. In addition, some manufacturers found it too difficult to maintain standards across country and faced translation issues, so bringing production home was the best way to ensure quality. 

Companies can also miscalculate their actual cost advantage from offshoring, according to Global Sources. Executives sometimes focus solely on the price of labor instead of total costs. With wages on the rise for Chinese factory workers and quality control risks, companies may not have as much of an advantage in offshoring anymore. Wages increased 19 percent per year in China between 2005 and 2010, reported. While labor costs were very low when companies first moved production to China, the gap has narrowed enough for manufacturers to consider returning home. 

Skills gap needs to be addressed for successful reshoring
The trend of reshoring is still in its early stages, though it is gaining popularity. According to Global Sources, 160 American companies have moved home in recent years. However, the biggest challenge of insourcing for some companies may be difficulty finding enough skilled workers in the U.S. to operate highly technical machinery in factories. As production moved out of the U.S., fewer workers sought factory jobs and a smaller number of young people are pursuing manufacturing careers. Technology has changed many operations, but there is still a significant demand for skilled workers.

"As more reshoring happens, more and better students will go into manufacturing, improving the workforce," Harry Moser, president of Reshoring Initiative, told Global Sources. 

While students are learning skills necessary to meet demands of the factory sector, firms can rely on manufacturing recruiters to find qualified professionals.