Made in China or made in the U.S.A.? There is a lot of talk about this critical, hot topic. Said another way, will reshoring increase? According to executive surveys, according to clients, according to top supply chain consultants, the answer is undoubtedly trending to MADE IN THE U.S.A.
A few noteworthy points on the topic overall (of course, it depends on your industry, company and unique situation; however, consider these from an 80/20 standpoint):
- COVID exposed risks: Suddenly, China manufacturing came to a screeching halt with COVID exposing the global risk in the supply chain. Establishing priorities were not necessarily the choice of your supply chain partner. How exposed is your supply chain?
- Amazon Effect: Customers expect immediate responsiveness, driving the need for speed and resilience in the supply chain. Were you able to respond?
- Labor is no longer noteworthy: Labor costs have decreased significantly in proportion to the total cost. Wages continue to rise in China. Productivity has increased. Technological advances have made labor less relevant. Did you stay too long in China due to inertia?
- IP theft: Executives are definitely concerned. What could be more important?
- Changing laws: China put a new law in place about a year ago that allows the government to see anything that comes across a server. Thus, everything sent to China will be widely known. Are you OK with competitors gaining access to your secrets?
- USMCA: This new agreement encourages increased collaboration in N.A. so that executives have more control over their costs, speed to market and flexibility and responsiveness to changing conditions. Have you explored new partnership opportunities?
What are your plans for manufacturing? Of course, many organizations moved manufacturing to Vietnam. However, is your Vietnam facility run by Vietnam or by China? You might have simply moved your issue. No one approach is always best. Instead, the key question is as follows: Are you minimally diversifying your supply chain? If not, jump on it. If you are interested in talking through these strategies further, contact us to discuss your situation and objectives.