There is some evidence that US manufacturers are at least reevaluating their offshore manufacturing strategies. According to a report released yesterday by Cook Associates Executive Search, 85 percent of 3,000 c-level executives polled in the low-volume, high-mix manufacturing space say production jobs might actually return to the US.
To be fair, in electronics manufacturing, high-mix, low-volume production has largely remained on our shores. Medical, defense, aerospace, and security equipment are among the leading electronic products still built in the US and Canada. Cook's survey cast a wider net than just electronics, including a range of small and midsize US manufacturers. However, Cook said in a press release that “low-volume, high-precision, high-mix operations, automated manufacturing and engineered products requiring technology improvements or innovation” are the jobs most likely to return.
And if anything has been emphasized by the electronics industry this year, it's been innovation. (See: Reconnecting With the Spirit of Innovation and Innovation, Globalization & the Perils of Commoditization.)
Overseas costs are the leading factor in the executives' decision-making, according to the report. Wage inflation, particularly in China, has many managers concerned. But respondents also cited other factors:
Nineteen percent cited logistics and 36 percent stipulated other reasons, including economic/political issues, quality and safety concerns, patriotism and overseas skills shortages for highly technical manufacturing processes.
The slow economy is also contributing to a stay-at-home mentality, the report says. Companies are increasingly focusing on quality and customer service as differentiators, both of which are better managed locally. There's also a concern that certain skill sets are lacking in the Far East:
China and Asia generally are unable to meet the demand for skilled workers. Finally, patriotism was cited as a factor as executives looked for a return to a “Made in America” mentality in the U.S.