A Case for the Return of US Manufacturing

When businesses look for a location to manufacture their products, they naturally want a place that will provide them with savings, quality and a fast turnaround time. To this end, they often move their facilities abroad, where labor and production costs tend to be cheaper. However, many of these businesses are unaware of the costs they can save by keeping their manufacturing on American soil. In this article, we will discuss how keeping your operations in the U.S. can improve product quality, shipping time, customer service and much, much more.

Why Companies Manufacture Overseas in the First Place

Before covering many benefits of manufacturing in the USA, here’s a look at the reasons why many companies opt to manufacture overseas:

  • The cost of production is cheaper. Every business owner understands the value of being able to lower production costs without sacrificing quality. In China and other countries where manufacturing jobs are often outsourced to, raw materials are often more affordable and — more importantly — the cost of skilled labor is cheaper. China often has both the equipment and skilled labor force to manufacture your products at a fraction of what it would cost in the U.S.
  • Mass production is more feasible. As manufacturing overseas is less costly, goods can be manufactured in larger volumes. Producing large volumes guarantees that companies and businesses can always meet their market needs, and doing so at a lower cost is an added bonus.
  • Manufacturing capacity can be scaled quickly. Countries like China can scale manufacturing rapidly to meet customer demand and, by hiring skilled labor and adding workshops, it can almost be done overnight. Demand here can be grown without interruption.
  • Businesses owners can focus on other aspects of their companies. Business owners who opt to manufacture their products overseas can focus on marketing, promotions, product development, brokering new deals and various other important aspects of their businesses.

Benefits of U.S. Manufacturing

While the above reasons often tempt businesses to manufacture abroad, they fail to consider the many benefits of manufacturing in the USA. These benefits include:

1. More Quality Control

When buying an item from a company that manufactures its products overseas, you will commonly find that the quality is inferior to that of items made in the United States. While the item manufactured overseas may have cost less, if it is of poor quality, it will likely end up costing you more in the long run since you will inevitably have to pay for repairs and/or a replacement. Keep in mind that it costs less to buy a high-quality item one time than buying a poor-quality item two or more times.

2. Response Time to Issues Is Faster

If you’re geographically closer to your manufacturing plant, you will be able to have more control over the manufacturing processes — allowing you to make sure all of your products meet set specifications and standards. If a problem occurs, you will be able to pick up on it sooner and correct it faster, which will save money and valuable time in the long run. What’s more — you can be more certain that all of the materials used in your plant comply with quality and safety standards, which will help make sure your business has the best building blocks to manufacture your products.

3. Shortened Lead Times

By manufacturing your products in the United States, you’re not just saving money on logistics costs — you’re also saving time in the production process. If products don’t have to travel as far to reach their intended retailer or distributor, they can reach the customer quicker, as well. Manufacturing in the United States accelerates the sales process, which enables forecast responses that are more agile and puts money in your pocket more quickly.

By shortening the lead time, customer satisfaction is sure to improve. In this digital age, customers now expect the products they’ve ordered to arrive very quickly — a phenomenon known as the Amazon Effect. Shorter lead times keep the costs of shipping low for consumers, while still meeting their expectations that their items can be delivered promptly.

To meet the practically instantaneous demands of consumers, many businesses that manufacture in other countries still have to maintain large inventory stores on hand in the U.S. anyway. However, manufacturing in the U.S. enables a push (instead of a pull) mentality for the supply chain of an organization. It also enables the organization to better deal with unexpected shifts in the market.

Additionally, since there is shorter lead time, the odds are better that a product sells before it expires. This can lead to potential savings over time for your organization and fewer wasted products.

4. Longer Supplier Chains Have Greater Opportunity for Error

With every element of a supply chain, there is an opportunity for error. The longer your supply chain is, though, the greater that error chance becomes. By shortening your product’s journey from the manufacturing plant to the hands of your customers, supply management becomes easier, and you reduce the chance of your product being damaged, lost or stolen.

5. More Jobs for Your Community

By choosing to manufacture your products in the United States, you are creating jobs for Americans. Many American consumers admire and value businesses that are rooted in their communities and hire their friends and neighbors, and they will choose products made in the USA for that reason.

If you keep your manufacturing in the U.S., you can take pride in the fact that you’re supporting the economy of your local community and that of your country. You’re helping your fellow Americans thrive financially, which, in turn, stimulates the economy. The manufacturing sector actually provides some of the highest salaries in the nation for industrial workers.

6. Reduced Delivery Costs

Although moving manufacturing facilities abroad to save on production and labor costs has been a common practice for a long time, in recent years, the costs involved with shipping the products and materials overseas have risen exponentially. If you opt to keep your manufacturing in the U.S., you’ll save a significant amount of money on both inbound and outbound delivery and shipping. Whereas shipping your products over an ocean can be pricey, shipping domestically can be quite reasonable. There is a wide range of transportation options available, and the shipping windows are broader. Furthermore, by using American delivery companies, you’ll eliminate the chance of miscommunication due to language barriers or differences in currency, which will create a significantly smaller margin of human error.

If you use American shipping providers, you’ll also be reducing the amount you spend on shipment insurance, ocean liner and/or jet fuel, customs fees, international taxes and much more. By lowering your shipping costs, you will also be able to keep the costs of your products lower, as you’ll have less overhead to pay. Low prices keep your customers loyal and encourage them to purchase your products against and again.

7. Environmental Friendliness

By reducing your delivery and transit costs, you’re not just saving money — you’re also saving energy, which makes manufacturing in the United States the more environmentally-friendly option. Ocean shipping is a big emitter of greenhouse gases, and by reducing your international shipping, your business will have a significantly smaller carbon footprint. Customers these days want to feel good about the businesses they buy from, and many will consider the environmental standards of a company when making a purchasing decision.

If a business is located abroad, however, many customers may have trouble feeling connected with it. Some customers wonder if the company is conducting environmentally-friendly and ethically sound business practices, which makes them less likely to purchase items manufactured overseas. Also, there is a trend called the “maker movement” that is currently taking the U.S. by storm. This movement places a stronger emphasis on local manufacturing and individual craftsmanship that leads to better environmental sustainability.

Manufacturing your products in your home country can lower your energy consumption, which is a sure way to grow your business.

8. Laws That Help Ensure High Standards of Employee Safety

By manufacturing in the United States, you will be better able to enforce safety practices to protect your employees. The Occupational Safety and Health Administration (OSHA) is an example. The regulations it mandates ensure workers stay safe on the job.

Countries to which manufacturing is commonly outsourced tend to have laxer safety regulations, which may put your workers at a higher risk of injury.

China, for example, where many American companies choose to outsource their manufacturing, is particularly infamous for its poor working conditions. Still, many people know little about the details, which include confinement, unsafe environments, extremely long hours and exposure to pollution and harmful chemicals.

China Labor Watch, a U.S.-based organization that defends Chinese workers’ rights and monitors working conditions in the country, recently conducted an undercover investigation of several toy factories in China. It highlighted the poor working conditions of their employees. The investigators discovered an appalling 23 rights violations, which include:

  • An illegal number of overtime hours: The investigation found that, during its peak production season, factory employees worked 80 to 175 overtime hours every month, despite Chinese labor laws limiting overtime to 36 hours a month.
  • No safety training: Workers did not participate in the legally required 24 hours of pre-job safety training, which would educate them about the harmful substances they encounter on the job and teach them how to safely operate machinery. Without this essential training, workers are not aware of the harmful chemicals they must come in contact with or the protective measures they should take.
  • No protective equipment provided: Workers may be exposed to harmful chemicals or work in environments with high levels of dust and noise, but were not given the appropriate protective gear.
  • No pre-job physical exam: Workers were not given a physical examination before starting work, making it difficult for employees there to prove that a disease resulted from having worked at the factory.
  • Blank contracts: Workers were forced to sign blank contracts that were not explained to them. They also received no copy of their contract.
  • Unpleasant living conditions: The dormitory at the factory housed eight workers in each room, and some of the showers didn’t even have hot water.
  • No independent unions: There were no unions that represented the interests of workers.
  • No social insurance purchased: The employers did not buy social insurance, which is required by Chinese Labor Law.
  • No effective grievance channels: When workers had issues at work, they would either resign or just endure the problems.

9. Better Customer Service

Manufacturing is not the only aspect of your business that benefits by staying on U.S. soil — customer service is also essential to the success of any company, and it tends to be greatly influenced by the country in which your customer service representatives are located. Customer service centers that are located abroad often make customers feel disconnected from the people dealing with their service problems. Furthermore, language barriers can also be present, which can cause miscommunication between customers and representatives, leading to frustration on both sides.

10. United States Manufacturers Pay Taxes

While manufacturing overseas has traditionally been a way to save on taxes, keep in mind that by re-shoring or keeping your operations in the United States, the taxes you pay will support the community where you and your workers live in terms of social programs, infrastructure and more. Manufacturers in the USA help to strengthen the American economy and keep our nation’s financial system secure.

All of these benefits together present a compelling case to keep manufacturing facilities on American soil. Although manufacturing overseas may appear to be a more cost-effective option for many businesses, in the long run, the advantages of keeping your operations in your home country far outweigh the short-term benefits of outsourcing them.

York Saw & Knife Proudly Offers Blades Manufactured in the USA

Since 1906, York Saw and Knife has been proudly manufacturing all of our blades in-house in the USA. We are one of the oldest blade manufacturers in the country. To this day, we adhere to our company’s core principles to bring you only the best quality products and customer service. To learn more about our brands and business, visit us online today.