Onshoring as a Reality
There’s quite a bit of skepticism about claims of onshoring taking place in the United States. And rightfully so! When you look at the shell of what were once great manufacturing industries in the United States, it’s hard to believe that onshoring is taking place. When you drive through the vacuum of what was once thriving manufacturing sections of Los Angeles, you can’t help but second guess any politician’s claim to the return of American manufacturing.
Of course, when you look at the drain of manufacturing jobs over the last several decades, you’ll really understand how unrealistic it is that manufacturing jobs are being created in the United States. More importantly, when you look at the lack of industry that we have in place, it isn’t a pretty picture. There’s not going to be a massive flood of manufacturing jobs coming back to the United States anytime soon.
The difference between the myth of onshoring and the reality of onshoring is that the reality of onshoring takes a tremendous amount of work on the part of business management. Were I not the GM at my company, we certainly never would have onshored the manufacturing of our patent pending quick zip belt. Everything we knew about manufacturing was based in China. The first conversation of manufacturing the product in the United States was very quick: “There’s no way you’re going to be able to manufacture this product in the United States for anywhere near what it costs in China.”
For more than half of 2011 I drove all over Los Angeles, emailed all over the country, and made phone calls to countless resources to figure out how realistic onshoring was going to be. While it is now a reality, it wasn’t looking very promising for the first couple of month. It was long hours, late nights, frustrating conversations…
The bottom line is that the information that’s available for finding manufacturing resources in the United States is sparse at best. So much manufacturing has vacated America that you’ll find more disconnected numbers these days than companies open for business. It can be discouraging, especially when you find that even industry trade organizations are going out of business. If you have non-profit trade organizations going under, it’s going to make it tough.
When evaluating the potential to onshoring, there are a couple of things to always keep in the foreground of thought. First, costs are going to higher but not as much as you might think. Second, you don’t have to go swimming in the onshoring pool. You can get your toes wet one part at a time. Perhaps there are some parts that aren’t realistic to make in the United States right away (plastic and metal part tooling is RIDICULOUSLY expensive in the United States! And by RIDICULOUS, I mean 5000% more expensive in most cases than China).
Finding raw materials in the United States isn’t always as easy as doing a search on Google or trying to find an industry trade resource. Like I mentioned earlier, many of them are closed. However, raw materials in the United States aren’t going to be significantly higher than they are in China, and usually you’ll find better quality. In my case of looking for leathers, I found leathers that I can’t even find in China. In fact, I’ve even designed a version of the belt that can’t be replicated in China because the raw materials just aren’t available there! By the time the raw materials were exported to China, it wouldn’t be cost-effective to manufacture this other design in China because the labor savings would be offset by the material logistics costs.
Speaking of labor savings, that’s really where China has the US beat. Hands down, it costs significantly less for a worker in China to perform the same work as a worker in the US. While people often point to quality, it’s important to note that there are some TOP quality products being manufacturing in China. That being said, there is a stable of manufacturing knowledge that does exist in the United States that just doesn’t exist in China. The factories I work with for my belts have decades and decades of experience, even multi-generational experience! That’s very hard to find in China, and will be hard to find in Vietnam (where so many are looking to manufacture now that costs in China are skyrocketing).
Manufacturing my particular product in the United States brings about a much higher manufacturing quality, material quality, and over all value to the product. While we can still manufacture in China, the version of the product that can be manufactured in China is nowhere near the value of what we produce now in America. Of course, in the world of fashion accessories, it’s not just about how it looks! Quality of manufacturing make the difference between a belt that lasts you a lifetime and one you’re throwing away in 3 years.
Ultimately, onshoring is entirely feasible and has tremendous benefits.