It seems that after years and countless numbers of manufacturing jobs leaving the U.S. will be returning to American soil, according to an article by MLive.com’s Melissa Anders:
But that trend of offshoring may be slowing or even reversing, according to research from Tobias Schoenherr , an assistant professor of supply chain management at Michigan State University.
“A lot more companies are thinking about reshoring or homeshoring than we anticipated, especially because of the issue of transportation risks and costs,” he said.
Schoenherr joined professors from the University of Tennessee and Miami University in surveying manufacturers nationwide. Of 319 responses, about 40 percent believe there’s an increased movement of reshoring, and nearly 38 percent said their direct competitors have brought operations back to the United States.
The reason that the out-sourcing and off-shoring trend has changed is largely due to manufacturing costs and issues of quality control.
Michigan Ladder Co. recently rethought its decision to outsource .
CEO Tom Harrison opted to invest several hundred thousand dollars to bring the manufacturing in house so he could better control costs and quality. The company began making fiber glass ladders in its own plant this summer.
As for other bringing other manufacturing back to Michigan, there are a few things going in Michigan’s favor:
If and when companies decide to move operations to the United States, then states like Alabama, South Carolina and others that generally have lower wages will likely benefit the most, Luria said. Michigan historically has been considered a high-wage state, but that’s becoming less true, he said.
The Michigan Manufacturing Technology Center, based in Plymouth, helps companies close the cost gap between foreign and domestic manufacturing.
The Michigan Economic Development Corp. also works with manufacturers and reaches out to companies that have outsourced or offshored work.
Not only does Michigan have the characteristics of a location for manufacturing to return, the auto industry is pushing its suppliers to keep more manufacturing in the state so that the manufacturing processes can be closer to the industry’s research and development. Other industries are following suit as well:
Michigan is home to a lot of the auto industry’s research and development, and it’s helpful to have manufacturing plants located near their R&D operations.
“We’re seeing a reconcentration of the auto industry here,” he said.
Other industries that are seeing a trend in homeshoring include aerospace and defense, industrial parts and equipment, electronics, and medical and surgical supplies, according to Schoenherr’s research.
Eagle Technologies Group is an industry leader in the design and installation of factory automation systems worldwide.