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Reshoring Manufacturing Sounds Good, But Where Will You Put Your Factory?

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markgrogan
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Re: A trend? In a way yes.....
markgrogan   8/31/2018 1:38:32 AM
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The aim of businesses in this world is to look for more profitability isn't it? To decrease costs and increase revenue by selling more or charging more for a better quality product. I would imagine that many companies would be exploring each and every opportunity to do this, but there will always be stragglers who don't believe the benefits until some other guinea pig dives headlong into the change first.

GLDPartners
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A trend? In a way yes.....
GLDPartners   4/20/2015 7:19:21 PM
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Well, this is about psychology really, what do we mean by a "reshoring trend" is it about a flood where 85% of the companies with offshore (China) locations are coming home?  No.  It is certainly not.  But if it is about a steady and increasing range of companies that are recognizing a wider spectrum of issues as important to their business, and choosing a North American alternative - then the answer is a resounding yes.  In the 80's and 90's, for many it was all about saving money on labor costs.  The world is more complex now and lower labor costs are 1) not as low any longer, and 2) are just a slice of the overall cost/delivery puzzle. 

We have had a number of clients want to talk about the "all-inclusive costs" of manufacturing, including transport, shipping time, investory carry cost, product production and supply chain management nimbleness, labor quality, raw feedstock cost and availability, etc.  For some, operations on this side of the Pacific makes sense, for others not so much, at least right now.  Obviously, Mexico represents a very different proposition from the US or Canada. Different solutions for different products. 

As for where to locate, well this just depends on the market and the specific user requirement.  For our site selection practice, asset availability is an important factor for sure and especially critical for some situtions. At GLDPartners, we haven't typically had a huge problem finding a building, or an asset delivery profile - but there can be delays in markets that aren't receiving waves of investment interest with infrastructure tht is one-step ahead of the market. But many development entities and their community economci development partners are getting far more advanced in terms of being able to deliver assets quickly - as priority projects and many are quite willing to move mountains while also offering attractive incentives

HaileyMcK
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Re: backshore to low cost areas
HaileyMcK   4/2/2015 1:44:07 PM
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What an interesting discussion! I think that the US university sytstem also has a role to play here. We are going to need more people trained in manufacturing, lostistics and supply chain activities. Also, instury organanizations and vendors need to step up and create opportunies for young workers to learn about the opporunities through internships and similar programs.

docdivakar
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Re: backshore to low cost areas
docdivakar   4/2/2015 12:10:29 PM
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@apek; people will have to live with urbann congestion in the years to come! The trend toward increasing urbanization is clear as reported by UN studies which says more than 75% of the world's population will live in the cities by 2050! This planet in general can not support loss of cultivable land on one hand and increasing population on the other.

Adapting and repurposing existing urban industrial infrastructure will therefore become inevitable.

MP Divakar

apek
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Re: backshore to low cost areas
apek   4/2/2015 4:18:04 AM
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@divakar - Reshoring to urban areas will increase urban congestion and still leave the rural areas in doldrums.

apek
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Re: backshore to low cost areas
apek   4/1/2015 10:18:36 PM
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@Joh- Developed countries also should be worried about trade deficits...everything will change by end of this year.

 

 

John Benito
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Re: backshore to low cost areas
John Benito   4/1/2015 5:48:37 AM
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Reshoring of consumer products from Asia to Europe and USA is not going to work very well for many reasons!!

Standard of living and expectations are very different and unlikely to change in the next 10 years.

Transport costs, to put a factory in the city of Los Angeles will not cost too much in transport costs compared to putting the same company in the Las vegas desert area. These in my opinion are semantics!!

Devceloped countries should concentrate on developing the things that will be of importance and critical in the future and that all Countries will need.

IE.

1) Water! Clean drinking water The technology is there and we should have many more or should be building many more desalination plants like the biggest one in Saudi Arabia.

2) Food! Developing countries are much better and have the resources and technology to produce larger harvests per Sq Mts than any country in Asia.

3) Communications. In many so called developed coiuntries it is rather expensive to have access to the internet WHY???. In HK and PRC, Internet is readily available almost anywhere this will have an impact in the way companies do business in future. And alos will help to educate the future generations.

For what is worth!!! JB

 

docdivakar
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Re: backshore to low cost areas
docdivakar   3/31/2015 11:29:27 AM
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@apek: you do have a point in reshoring at rural instead of urban areas BUT this has to be qualified with which industries can do so. As you know many hitech industries need a host ancillary industries around them and also need access to consultants and specialists. Your point therefore makes sense for completely self-contained industrial entities.

On the flip side, urban areas are still the best choice for most reshoring opportunities as long as one addresses the issue of qualified workforce -many have left the industry altogether or have moved away! But I am not yet prepared to say we have reached a point of no return for most industries to reshore!

MP Divakar

apek
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Re: backshore to low cost areas
apek   3/31/2015 10:53:44 AM
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It also needs reforming Education system, Immigration system and most importantly monetary and fiscal policies which are not possible without reforming democracy which itself is not functioning properly.

nssdiver
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Re: backshore to low cost areas
nssdiver   3/31/2015 9:48:26 AM
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Reshoring, backshoring, onshoring - nothing will happen en-mass until the populace at large cares more about Made in America than it does now.  I do not know how to avoid politics in my response, but as long as we are importing people that hate our country and are teaching people how to take instead of give, Made in America is going to matter less and less. 

 

Onshorers have a steep, albeit not unclimbable, road ahead of them... 

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