The American Manufacturing Renaissance

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Category: Business and Industry

Date Submitted: 11/16/2012 06:45 PM

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It's clear that three decades after off-shoring emerged as the best way for many domestic corporations to lower their cost of doing business, we are now seeing a rethinking of that strategy. It appears that corporations are becoming less focused on hourly wages in favor of the 'big' picture. There are several practical reasons for this about-face: rapidly rising production costs in China, India, as well as other Asian countries; soaring transportation cost; increased risk of supply chain disruptions when doing business in faraway locations; and, the flight from unregulated overseas markets where companies have found that they cannot assert their rights to quality control and intellectual property - just to mention a few.

As companies have gotten better at reducing inventory and adopting just-in-time delivery, supply chains stretching around the world have started to look like liabilities. The fragility of global supply chains became vividly apparent when the tsunami in Japan and floods in Thailand last year caused major disruptions for companies. A survey of 150 shipping companies by transportation research firm Wolfe Trahan showed a dramatic shift over the last year in their clients’ thinking. Among companies planning to move production, those considering an increase in outsourcing to China fell to 9 percent in October from 18 percent in April 2011. Those expecting to shift production back to the U.S. rose to 21 percent from 10 percent. Supply chain analysts at researcher Gartner recently predicted that by 2014, the production of 20 percent of goods now made in Asia and destined for U.S. consumers will shift to the Americas. In a recent study by Accenture entitled 'Manufacturing's Secret Shift,' 61 percent of 287 manufacturers surveyed reported that they're thinking of moving operations closer to customers.

Manufacturing drives research and innovation. It promotes skills development. And it pays better than many other job classifications. The average hourly...