Reshoring on the rise?

Posted by mmcmullan on 12/12/2012

On Monday, NPR’s nightly news broadcast, All Things Considered, detailed President Obama’s visit to a Detroit auto parts plant where he talked to a gathering of workers about the recent uptick in job reshoring.

NPR contacted Alliance for American Manufacturing (AAM) Executive Director Scott Paul, who explained some of the benefits of returning production to the U.S.: “You get a synergy that you don't when you're trying to innovate in the United States and produce an ocean away in China.”

Paul is not alone in this observation. According to Willy Shih, a professor of management practice at Harvard Business School, this emphasis on local manufacturing coordination is part of an emerging trend:

“I was talking with the president of a small Ohio-based tool manufacturer this morning,” said Shih. “He was telling me how they tried setting up a factory in China ten years ago, but that coordination was hard work, and he preferred to keep making products for the US market in Ohio. I’ve heard this more and more lately, and I think a number of big companies … are thinking hard about this.”

With rising wages in China and increased domestic pressure to curb environmental abuses, there are fewer benefits to mitigate the high cost of a global supply chain. As more firms consider bringing operations back to the U.S., Congress and the Administration should adopt a national manufacturing strategy to spur this repatriation.

Click here to listen to the full interview on NPR.

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