Over the past decade or so, outsourcing has been a hot topic. Several manufacturers moved plants overseas to take advantage of cheaper labor. China especially has been a hot spot for outsourcing operations. But China is no longer the low-cost option, according to Thomas P.M. Barnett, one of the keynote speakers at the National Association of Electrical Distributors' annual National Electrical Leadership Summit early this month. "The Chinese cheap labor threat ended last year," Barnett says.
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More manufacturers are "reshoring" – or bringing operations back to the U.S. In a recent survey by MFGWatch, nearly a third of respondents indicated they would be researching bringing production closer to North America from a "low-cost country" in the next three months. Twenty-five percent of respondents say they already have.
The cost of shipping, quality control issues and liability concerns all play into the decision to reshore. But there's more: Chinese labor simply is no longer as cheap as it used to be, according to Barnett.
The global marketplace is not going away. But manufacturers are coming to the realization that it may be easier to manage risk and respond to challenges when the work isn't being done 10,000 miles away.