Today we want to make clear the reasons to manufacture in the U.S. Just a couple of years ago if you walked into any big-box store. And picked up an item at random off the shelf, and looked at the label. Chances were you would see the same three words: “Made in China.” Depending on the product, it might read “Made in Mexico” or “Made in Taiwan” – but it almost certainly wouldn’t have said, “Made in the USA”. This is slowly and surely beginning to change.
When looking for a manufacturer’s for cost savings, quick turnaround and quality it is important to consider your location. Whilst in the past many companies moved their businesses overseas in search of cheaper production and labor costs they abandoned the US manufacturers and in doing so they forgot the many benefits of partnering with a U.S. based manufacturer.
Below we discuss the main reasons to manufacture in the US, especially in the long run.
Shorter Lead Times
Manufacturing in the US doesn’t just save money through lower logistics costs but it also saves you time in the production process. When goods have less distance to travel to get to their distributor or intended retailer, they can be delivered more quickly to your customer. This accelerates the sales process, enabling more agile forecast responses, and getting money in your pocket sooner. A win-win situation for everyone.
Shorter lead time is also a guaranteed way to increase customer satisfaction. We all live in the digital age when customers expect their goods yesterday. This phenomenon is known as the Amazon Effect. Shorter lead times will keep shipping costs lower for consumers, while still meeting the expectation that the product can be delivered on time.
Companies have to meet these short lead-time demands, so these companies who manufacture abroad must keep large inventory stores on hand in the United States anyway. This can end up being both costly and risky in terms of paying for storage space, labor to control/maintain inventory, as well as the chance that it could expire or become outdated before it sells. This is especially true because of fast-moving technology. When you manufacture in the United States gives you the ability to successfully weather unexpected market shifts.
More Jobs for Americans
When choosing a U.S. based manufacturer you are choosing America, you are choosing to help these manufacturers create jobs right here at home. Your customers are much more likely to choose you and to value your company if you choose to manufacture right here at home. They will see your company as one rooted in their own communities. It means they are backing companies that employ their neighbors, family, and friends. This means that they will pick your products over those of your direct competitors.
By choosing to keep your manufacturing in the United States, you’re supporting the local and national economy and helping American families thrive financially, which in turn further stimulates your local and national economy. Manufacturing currently provides some of the highest wages in the country for industrial workers. In fact, according to the U.S. Bureau of Labor Statistics, industries that specialize in producing goods paid an average salary of $56,799 per year—more than $10,000 above other popular working-class sectors such as healthcare or teaching.
Also remember that it’s not just manufacturing jobs that you’ll be helping to create. In 2013, the American manufacturing industry employed about 12 million people, but it also helped create an additional 17.1 million ancillary jobs. U.S. manufacturing helps create jobs not only for the individuals who are manufacturing the components and products but for those who are selling them, distributing them, servicing them and using them in other technologies.
The impact of manufacturing on other industries cannot be ignored when considering business growth. During 2018, for every one dollar of manufacturing expenditure, additional business growth of $1.89 appeared in other industries. The affected sectors include transportation, supporting services, and retail operations.
Reduced Cost for Deliveries
Locating manufacturing facilities abroad as a means of saving labor and production costs has traditionally been a common practice. However, the logistics costs involved with shipping products, materials, and/or components halfway around the world have climbed. Keeping your manufacturing in the United States, you’ll save significantly on inbound and outbound delivery and shipping costs. While shipping products from overseas can be expensive. Shipping domestically provides a range of transportation modes and broader shipping windows that can offer significant savings. Especially as the cost of transport has come down due to lower than average fuel costs. Plus, by working with American delivery companies, you’ll eliminate the risk of miscommunication due to language barriers or currency differences, creating a much smaller margin for human error.
Using U.S. shipping providers also means that you’ll again be contributing to the national economy, and you’ll significantly reduce the amount of money you’re spending on shipment insurance, jet/ocean liner fuel, international taxes, customs fees, and more. By keeping shipping costs low, you’ll also be able to maintain production costs lower. Low prices keep customers loyal and more likely to buy again and again. All of this begins with your decision to buy from a US manufacturer.
American Customer Service
Have a great day! It’s something which is heard all over America. Strangely it’s very rarely heard elsewhere in the world. We in the U.S. Are known for our great customer service. Customer service is an integral part of any company’s success. And it’s often majorly influenced by the geographic location of your customer service representatives. If your customer service representatives and centers are located abroad, customers often feel a disconnect between themselves and the people handling their service issues. Most of the time there are going to be language barriers that can cause miscommunication between representatives and customers, this can then lead to problems and frustrations on both sides.
Cutting down on transit and delivery costs not only saves money and energy, making U.S. manufacturing a much more eco-friendlier option. Ocean shipping is one of the biggest emitters of greenhouse gases, and by cutting down on international shipping, your company will produce a much smaller carbon footprint. Many consumers will factor a company’s environmental standards into their purchasing decision.
Most consumers will begin to wonder whether you’re conducting ethically sound and environmentally friendly business practices. This then makes them less likely to buy products made overseas.
By manufacturing at home and lowering your overall energy consumption, you’ll be sure to grow your business.
In addition to having weaker environmental regulations. The countries that produce the goods, Americans buy often have no laws to protect the rights of their workers. A 2015 report from the Institute for Global Labour and Human Rights has shown how Chinese workers producing toys for well known American brands such as Hasbro, Mattel, and Disney work 12 to 13 hour days and sleep on plywood bunk beds in crowded, dirty, and freezing dormitories. An earlier report from 2006 uncovered child labor at a factory in Bangladesh that produced clothing sold by Walmart and JCPenney.
A Higher Standard of Safety & Quality Control
Problems can sometimes arise during the entire manufacturing and design process. By simply being geographically closer to your production facility, you’ll be able to execute tighter control over the manufacturing process. Therefore allowing you to ensure that all products fit your standards and specifications. In the end this will save you time and money.
All materials being used in a U.S. facility adhere to strict safety and quality standards.
Manufacturing at home also allows you to enforce greater safety practices in your facilities to help protect your workers. Countries where manufacturing is commonly outsourced often do not have the same level of safety regulations of the United States. This could put your employees at a higher risk of injury while working with a product.
U.S. Manufacturers Pay U.S. Taxes
The benefits of keeping your operations in the United States should not be understated. By keeping your manufacturing suppliers in the United States, your taxes will support the community. The one that you and your employees live in in terms of infrastructure, social programs, and more. Keeping manufacturing operations in America strengthens the United States’ economy and keeps our government’s financial system secure.
These benefits present a solid case to keep manufacturing companies in the United States. Overseas manufacturing might seem like a cheaper option for many companies in the short term. The benefits of keeping your manufacturing supplier right here at home far outweigh the short-term benefits of moving abroad.
Get in touch with us to see how we can help.