American Manufacturing Renaissance: Fact or Fiction?

Published : February 5, 2015

american-flag"Made in America"— a three-word phrase that can have considerable power in the business world. It can shift suppliers, build whole careers and coax customers to buy one product over another, even if the cost is a little higher. With a lot of talk going on— from the manufacturing floor all the way through to the fulfillment warehouse— about a renaissance in domestic manufacturing, how much of the hype is truly believable?

Naturally, American manufacturing growth presents excellent job and infrastructure-building opportunities for those living stateside, but it brings with it a host of problems and costs as well.

Here's a breakdown on the alleged manufacturing boom that's either here, coming, or absent from our shores, depending on who you ask.

The "Happening Now" Camp

Brian Iams of Supply Chain 24/7 makes a compelling case for recognizing America as being on the brink of a manufacturing renaissance. He cites growth in the manufacturing sector post-2009 recession, lower gas and oil prices and even a new turnover in seats in congress, which represent the potential for new laws and tax breaks, as being indicators of resurgence. Iams goes on to lay out the needs that should be met to encourage this forward momentum, such as an emphasis on education to produce the skilled laborers that domestic manufacturing companies are so eager to obtain.

Adam Robinson of Cerasis points out that consumers are also responding favorably to the concept of "Made in America" again, and voting with their wallets— most notably in the apparel industry, where the seemingly benign tag is being used to drive sales

The "Not So Fast" Rebuttal

Yet another article by Supply Chain 24/7— this piece by Supply Chain 24/7’s staff writers— attempts to curb this "Pollyannaish optimism" by pointing out that much of the information coming from those heralding a new age of US-based manufacturing is anecdotal and scattershot.

While there has been growth in manufacturing for the last three years, pulling the curtain back a little further reveals that the levels of that manufacturing still fall short of those from 2007, and that as of 2013, America still carried a $458 billion trade deficit. If the frame is narrowed to consider only a small section of the manufacturing growth timeline on our shores, or intense focus is placed on rosy headlines of reshoring from a handful of companies rethinking global manufacturing, it's easy to see where these misconceptions kicked in.

It isn't to say there isn't healthy growth in manufacturing in the US, or even that the capability to form a renaissance isn't in place, simply that handing out handshakes and cracking open the champagne might not be prudent quite yet. 

So What Happens Now?

As with any movement in business, there needs to be ripples before there are waves. Manufacturers can hunt for domestic components and take other small steps to encourage growth. You can support domestic manufacturing without risking current business stability with hasty decisions like abruptly relocating all manufacturing stateside. You could, for example, research the cost savings involved in using a new fulfillment service to shift current overseas manufacturing steps to the US, and consciously incorporate those savings into your planning or comparisons.

There does not need to be, after all, a "renaissance" in full bloom to reap the benefits of staying in-country. Should a true rebirth occur, only benefits— in the form of increased component and manufacturing providers, thus driving down cost— await the company that's already partnering with domestic vendors.

There's never been a better time to sit down with the people, products and manufacturers in your supply chain, from production to fulfillment services, and discuss how reshoring foreign sections can benefit your company. Even if you walk away from the discussion table with a "not right now," you'll have a better idea of what role you'll play in the emergence of a future American manufacturing renaissance.

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Topics: Supply Chain Logistics

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