Is It Possible to Bring Manufacturing Back to the U.S.?
For the first time in the history of EDS (Electronic Distribution Show), industry associations ECIA (Electronic Components Industry Association) and ERA (Electronic Representatives Association) joined forces at the Cosmopolitan Hotel in Las Vegas, NV on May 8, 2013 and offered a co-sponsored early morning breakfast for attendees in preparation for a second full day of meetings between distributors and manufacturers.
The morning’s entertainment came in the form of keynote speaker, Dennis Young, Executive Vice President of Business Development and Marketing, Sanmina-SCI, who gave a presentation on reshoring, the new buzzword representing the return of manufacturing to North America.
In the press, “reshoring” is defined as the repatriation of manufacturing operations from a low-cost country, back to the home country. In Washington, it stands as the repatriation of manufacturing operations from China, back to the U.S. But in reality, according to Young, it is the transfer of “some manufacturing production from a low-cost country back to the home country or to another country, low-cost or not.”
Several factors come into play when manufacturers make the decision to move or reshore (see chart). The wage gap is never the only reason, but in all cases, the move makes business sense – it’s not simply a feel good story.