Re-shoring: why U.S. manufacturers are bringing jobs back home

SAMALogoDouglas CarlbergBy Douglas Carlberg, CEO/President, M2 Global Technology Ltd.

Great companies are forged in the harshest of economic climates. Inspired by challenges, they thrive through innovation and best practices, displaying the flexibility to respond to changing conditions. A trend that exemplifies this approach is re-shoring—the repatriation of manufacturing to America from offshore—which has been growing for about three years. Lean manufacturing practices have been a significant factor in enabling U.S. companies to flourish through re-shoring.

For several decades, factories (and the manufacturing jobs that go with them) had been moving abroad to countries where labor and materials were cheaper. This trend has been reversing, as companies are building new factories in the U.S. or updating and reopening existing factories. The movement of manufacturing out of the U.S. was called off-shoring, which is the basis for the term re-shoring to describe the current phenomenon.

American companies began producing goods abroad because the costs of materials and labor were lower. Due to changes in the global marketplace and the difficulties involved in doing business from a great distance, these advantages are vanishing. Prices have increased in almost every facet of manufacturing, including raw materials, transportation, and labor. Low or inconsistent product quality also has compromised companies’ profits. In addition, the U.S. government is offering financial incentives (such as tax breaks) for companies that do business in America.

A key to success in today’s markets for manufacturers is flexibility: the ability to respond quickly and effectively to rapidly changing conditions and customer demands. U.S. companies that have embraced lean manufacturing have been the ones to succeed through re-shoring. M2 Global Technology has been manufacturing radio-frequency electronic components and aerospace precision parts in the U.S. because we value the ability to offer our customers the best possible service and consistent, high-quality goods created through our flexible and lean manufacturing process. M2 Global is growing our market share by embracing lean concepts and principals—something every company can do.