Re-Shoring to America

The National Tooling & Machining Association (NTMA), Precision Metalforming Association (PMA), and Association for Manufacturing Technology (AMT) have announced the 2010 Contract Manufacturing Purchasing Fair, also known as the Re-Shoring Fair.

This new event will place an emphasis on bringing lost manufacturing jobs back to the United States by uniting OEMs with competitive domestic suppliers. It will be held May 12, 2010 at the Hyatt Regency Irvine Hotel in Irvine, California. The fair will focus on machined, stamped, and fabricated parts, special tooling (dies, molds, jigs, fixtures, and gauges) and special machines.

A recent Industry Week article by Josh Cable made the following points on re-shoring:

1. Manufacturers decide to offshore manufacturing work because the freight-on-board costs are lower for work done overseas. However, if those companies factor in the costs of regulatory compliance, potential intellectual property loss, visits to overseas vendors, potential product quality problems, high foreign wage inflation, and carrying extra inventory as cushion against late or damaged shipments, the gap is favorable or small enough that it makes sense to re-shore that work.

2. Among the other harder-to-quantify benefits of re-shoring are the advantages of locating manufacturing operations closer to R&D activities, as well as, the reduced carbon footprint of shorter shipping distances. Companies that are heavily focused on being “green” can make a good case that the total carbon footprint of a part made 100 miles away in the U.S. is perhaps a half or a third of what it would be if it was made in China and shipped to the U.S.

Cable’s article also noted it is hard for American manufacturing operations to compete with the price of commodity Chinese-made T-shirts, toys, and similar high-labor/low-cost items. Typically, re-shoring is more attractive for the production of new high-mix/low-volume parts and components that are sold or used in the North American market, require frequent engineering changes, have short lifecycles, are produced with low labor content, or involve high shipping costs versus labor costs.

For more information about the Re-Shoring Fair, and the opportunities available for competitive domestic sourcing, visit this web site.