In the grand scheme of the manufacturing industry, $2.5 billion is not a lot of money. But for electronics companies and workers in the US, it’s a bonanza. Within the next three years, reports the IPC, both OEMs and EMS companies are expected to bring more than $2 billion worth of manufacturing services and jobs back onshore.
Respondents to IPC’s survey of more than 200 electronics companies indicated they would establish both new operations and repatriate offshore manufacturing through 2015. If past trends continue, most of that value will come from OEMs:
Survey results showed that original equipment manufacturers (OEMs) were largely responsible for operations returned to North America from overseas since 2009, accounting for more than 90 percent of the value and number of jobs brought back. The electronics manufacturing services (EMS) industry was also a big contributor. One-quarter of operations that returned to North American since 2009 came from China, with other countries making up the other 75 percent.
The EMS industry accounts for the largest share of overseas operations that participating companies plan to bring back to North America in the next three years. New operations, however, represent a much larger share of future North American production, and these planned new operations were reported primarily by OEMs.
The reasons cited most often for onshoring include quality control and customer proximity, the IPC finds. Other research found that rising labor costs in China are also driving the move back to the US. (See: Data Points to More Onshoring and Execs Cite Reasons for Onshoring.)
In upcoming posts, we’ll take a closer look at the IPC findings.
Though manfucaturing looks very lucrative, its has high operational cost associated with it. Labor cost, raw material cost and basic services cost. And its definitely not an easy business. You need to maintan standards and keep delivering.
"but the driving factors involved mean this will probably be a cyclical trend.
The Bring Back Jobs Home (BBJH) trend may not last long if it is not backed up with appealing motivating factors. Apart from tax reduction, we will certainly need other motivating factors to attract and maintain manufacturing companies onshore.
The trend to onshoring looks promising, and this new data indicates that plans along these lines are taking shape. It's about time the electronics industry brought some manufacturing activity stateside, but the driving factors involved mean this will probably be a cyclical trend.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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