On the face of it, bringing electronics manufacturing jobs back to the US from more affordable foreign locations is all the rage. At EBN, though, the debate remains evenly split.
In our recent poll (and it's not too late to weigh in here), our readers remain pretty evenly divided on the question of whether electronics OEMs will bring jobs back to the US. In fact, the “yes” votes and the “no” votes have each drawn 38 percent of respondents.
Another 24 percent, nearly one quarter, are taking more of a wait-and-see approach. Still others wished we had offered an “It depends” option. “With increasing logistics costs, onshore manufacturing becomes a better option for heavy and bulky items (cars are an example),” commented EBN blogger Ken Bradley. “For smaller lighter items, offshore still wins.”
There's a lot to be said for domestic manufacturing, and there is an increase in OEM efforts. In fact, onshoring efforts have created between 250,000 and 500,000 jobs in three years, claims Michael Rackley, senior director of product completion for Ryder Supply Chain Solutions.
The benefits range from an opportunity to shorten the distance between manufacturing and the end consumer, to better quality, lower costs in some situations, and potential tax credits, Rackley contends.
Our readers saw some “softer” benefits of re-shoring for OEMs. Commented a reader who posts as Supply Network Guru:
[There's] also the opportunity to sell the American pride of saying the product was made in the USA. That has an impact on most buyers – they associate it with better quality but I'm sure they will pay a few extra bucks just to help. It won't apply to all products but there's room for it.
Of course, balancing that out is the reality of higher wages, higher setup and retooling costs, and a need for workforce training.
“I don't think companies can derive any benefits by re-shoring their production/development facility to US,” said one EBN site member called Jacob. “More than logistic issues, cheap manpower and availability of raw materials/skills are important.”
Others say that these concerns are overrated. For example, in an October 2012 report, the Boston Consulting Group (BCG) estimated that the US is short between 80,000 and 100,000 highly skilled manufacturing workers. That sounds like a big number, until you consider that it is only about 1 percent of the total number of US manufacturing workers, BCG said.
“Shortages of highly skilled manufacturing workers exist and must be addressed, but the numbers aren't as bad as many believe,” said Harold L. Sirkin, a BCG senior partner and coauthor of the research in a press statement. “The problem is very localized. It's much less of an issue in larger communities, where supply and demand evens out more efficiently thanks to the bigger pool of workers.”
Clearly, it's a complicated issue. Let's keep the discussion going, whether you are optimistic or pessimistic about the future of US manufacturing. Share your favorite examples of success and failure. We'd like to hear from you.