A Michigan State University (East Lansing, MI, USA) academic has authored a new study that claims that many US firms are moving or considering moving their manufacturing operations back to domestic soil from overseas.
According to Tobias Schoenherr, an assistant professor of supply chain management, rising labor costs in emerging countries, high oil prices and increasing transportation costs and global risks such as political instability are fueling the trend.
"Going overseas is not the panacea that it was thought of just a decade or so ago. Companies have realized the challenges and thus are moving back to the US," says Schoenherr.
Schoenherr's study found that 40 per cent of manufacturing firms believe there is an increased movement of "reshoring" -- or moving manufacturing plants back to the US from countries such as China and India. While the results differed by industry, the trend was led by aerospace and defense, industrial parts and equipment, electronics, and medical and surgical supplies.
The study, which was sponsored by the Council of Supply Chain Management Professionals and based on a survey of 319 firms, also found that nearly 38 per cent of companies indicated that their direct competitors have already reshored.
In addition to rising costs and global risks, Schoenherr said companies are concerned with the erosion of intellectual property overseas and product quality problems, which can be difficult to fix when dealing with multiple time zones and language and cultural barriers.
Rob Glassburn, the Vice President of Operations at 3D Engineering Solutions (Cincinnati, OH, USA), would be the first to agree with Schoenherr. In a recent blog, Glassburn described how his company had recently been called in to reverse engineer parts for a popular airsoft gun maker that once manufactured its products abroad. And that, according to Glassburn, was a direct consequence of such intellectual property theft.
Specifically, Glassburn wrote, problems arose when the particular gun maker learned that its offshore manufacturer was using its proprietary tooling to "back door sell" guns made with its own equipment. To curb the practice, it closed down operations and moved manufacturing back to the US, which helped secure 300 domestic jobs.
Sadly, however, no CAD models or prints of the gun parts were accessible when the gun maker returned production back to the US, and that's why 3D Engineering Solutions was called in. By employing the company's 3D laser scanning technology to digitize the assembly of air gun parts, the company was then able to create tooling to manufacture parts in the US once more.
One can only hope that if the trend to reshore continues, it will also mean more business for those machine builders in the vision industry who develop systems to automate the process of inspecting those products as well!