U.S. Manufacturers Find Value in Bringing Jobs Back Home

In the article “U.S. Manufacturers Find Value in Bringing Jobs Back Home”, the main focus is the current and anticipated reshoring trend present in the U.S. manufacturing industry.  The once common practice of sourcing to China for a supply chain cost advantage is losing its appeal and practicality.

The gap in savings from manufacturing in China is quickly closing.  According to Harold Sirkin of the Boston Consulting Group (BCG), “Improvements in Chinese productivity simply are not making up for rising wages and the devaluation of the currency.”  BCG predicts that by 2015 the costs to manufacture in China will only be 10 percent lower than in the U.S.  That 10%, however, will be chipped away at by other factors. (It is important to note that the 10% lower manufacturing cost figure does not include all goods, especially clothing and shoes, but it does account for a wide range of other products.)  BCG explains, “companies may find that any cost savings to be gained from sourcing in China may not be worth the time and myriad risks and headaches.”

Sirkin believes that these economic changes will translate into two million to three million jobs being reshored to the U.S. in the next 10 years, adding $100 billion in economic growth to the country’s economy. While reshoring is not the right decision for every company in the manufacturing industry, it is definitely an idea to at least be looked into further.