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The Dollars & Sense of Onshoring

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Hailey Lynne McKeefry
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Re: The Reshoring Trend
Hailey Lynne McKeefry   5/30/2014 6:01:53 PM
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@Eldredge, I believe that customer service and time to market are going to be key considerations in where to do manufacturing. It's not just that the prices are chaning...Really, a whole different formula is being applied.

Eldredge
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Re: The Reshoring Trend
Eldredge   5/28/2014 8:04:24 PM
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@Hailey - Exactly. It seems like, in prior generations, the low cost model has been proximity to raw materials. In some industries, that is still the case. Buit in others, that has to be balanced with the incentives for locating production close to tbe customer.

Hailey Lynne McKeefry
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Re: The Reshoring Trend
Hailey Lynne McKeefry   5/20/2014 8:04:56 PM
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@Rich, thanks for pulling out those figures from teh report. Clearly, even with rising cots, there's still a huge gap between the cost of Chinese labor and American.

Hailey Lynne McKeefry
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Re: The Reshoring Trend
Hailey Lynne McKeefry   5/20/2014 8:03:14 PM
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@Eldgredge, certainly... really we aren't talking about US Versus china manufacturing we are talking about manunfacturing near the customer or far away from the customer. Despite the costs associated with staying near the cutomer, there are some real advantages as well. 

Eldredge
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Re: The Reshoring Trend
Eldredge   4/24/2014 8:51:18 PM
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@Hailey - Continuing with previous post - this is why I advocate the frequent and widespread use of crystal balls.

Eldredge
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Re: The Reshoring Trend
Eldredge   4/24/2014 8:49:32 PM
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@Hailey - Doesn't the formula change when the customer resides in China? The trick becomes finding the right balance to minimize cost, depending on where product will ultimately be sold.

harpat949
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Re: The Reshoring Trend
harpat949   4/19/2014 6:53:39 PM
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The article  lacks quantitative information such as current labor rate comparison and examples with quantitative cost analysis. Obviously if the labor content in a product manufacturing is insignificant, it will not make sense to offshore. But it is doubtful that return to onshoring has much to do with rising labor rates because Chinese labor rates are still insignificant. The real reason may be difficulty of managing offshore operation and splurging on travel expenses by top management. 5 star hotels are quite expensive all over the world and so are business class and first class air fares and typically the people who would travel would have the least knowledge of manufacturing. A quantitative analysis can be very revealing.

Hailey Lynne McKeefry
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Re: The Reshoring Trend
Hailey Lynne McKeefry   4/18/2014 12:16:40 AM
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@jleoaita, thanks for weighing in. Do you think that the way that OEMs are thinking about where to shore manufacturing is getting more sophisticated? If not, what do you think needs to happen to make OEMs smarter about these decisions?

jleoaita
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Re: The Reshoring Trend
jleoaita   4/17/2014 12:54:36 PM
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Stay or reshore depends on what was the key factor behind the decision. Companies that went offshore for only labor costs advantages will for sure migrate back or move to the next low labor cost "shore" once the costs gap no longer justifies the decision.Those that offshored to take also advantages of local market demand or other key resources are unlikely to reshore.  

Hailey Lynne McKeefry
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Re: Attract manufacturers
Hailey Lynne McKeefry   4/16/2014 8:08:29 PM
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The key takeaway to me is that there is no one size fits all answer when it comes to deciding where to manufacture. Organizations need to be thinking more strategically about these questions rather than looking at simple cost calculations.

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