Reshoring Can Pay Big Dividends for Manufacturers
As the pandemic has brought many shipping delays and has ruined production schedules, a wide range of manufacturers are considering reshoring production. Soon they could be slapping the “Made in the U.S.A.” sticker back on their products.
At Koller Craft, we have had many of our Tier 1 customers reach out to us to explore the potential of reshoring, instead of continuing to outsource their production to Mexico and Asia—mainly China. With tariffs, border issues and labor strikes, among other issues, shipments to the U.S. can take weeks, if not months. If there is an issue with a part made in America, it can be fixed in a day. On the other hand, if there is an issue with a part from China, it could take months to be resolved. There is a high level of risk management when you are dealing with a supplier that is six to eight weeks away in shipping time alone.
Tariffs also cause issues for companies. A common misconception is that tariffs are paid by countries, but they are actually paid by the manufacturers. So tariffs, even if they are short-term, make it challenging for companies to invest their dollars in better equipment and improve manufacturing since they do not know if the tariff will last weeks, months or years.
Overseas production is often unreliable and makes it nearly impossible to maintain any control as it travels from country to country. Many companies fail to include the additional costs of offshoring in their plans, which can blow up their budgets and drastically hurt their bottom lines.
These are among reasons manufacturers are looking to bring their manufacturing operations back to U.S. soil.
With all of the time and additional money Tier 1s are losing, that makes Tier 2s like Koller Craft a more appealing option. Shipping from Asia means at least 3 to 4 weeks on the water and additional time in ports. With Koller Craft having the ability to make daily deliveries, it may be time to bring your products back home.
To learn more about how Koller Craft can help you, call 636-343-9220.