Article in the Wisconsin Small Business Times discussing manufacturing moving back to the U.S. from China and other place overseas. Quote on the manufacturing boomerang trend:
"Select manufacturers in old-line industries such as investment casting, injection molding, precision machining and tool-and-die making are routinely taking business away from their Chinese competitors."
The companies profiled in this article are using technology and automation to cut production costs, increase their flexibility and speed up their product development and delivery times. For example Signicast, who make metal components and castings, focuses on speed and flexibility. From the article:
"Signicast’s use of automation and the four different manufacturing modules enable the company to respond quickly to new orders and to requests for changes. That speed and flexibility give Signicast a significant edge over foreign competitors.
"“Speed is everything, and it’s one thing that China can never do,” McDonald said. “Quality is one thing they can improve on. But we can, from conception, to tool up to approval, have a product run in less than nine weeks now. In China, lead time is more like 20 or 30 weeks once they have the tool built.”
Reich Tool and Design is also profiled. They are using a niche market strategy:
"Instead of trying to compete on price, Reich Tool & Design Inc., a tool-and-die manufacturer based in Menomonee Falls, is working to develop niche manufacturing capabilities in aerospace, medical and energy exploration - areas it believes that Chinese manufacturers cannot compete."
A third company discussed in the article, Plastic Components, uses a low cost strategy:
“Our tag line is, ‘Low Cost at Home,’” Duffey said. “We try to tell people to change their mindset, that they don’t have to go to the Third World to buy parts at competitive prices. They can get them in Germantown, Wis.”
Despite the boomerang effect the majority of off-shore manufacturing is not going to come back to the U.S. But rising overseas labor and transportation costs, coupled with increased domestic use of automation and technology, is making U.S. manufacturing increasingly cost competitive. Add to that strategies built around niche markets, customization, flexible systems and delivery speed and a number of U.S. manufacturing sectors are effectively competing with overseas competition.
I saw this on the MFGx blog.