Over the weekend NPR ran a story on reshoring: not necessarily a new topic, but one that has gained new publicity by the recent announcement from Apple that it will move production of a line of its Macs from China to the United States.
NPR’s story highlights the case of GE, which has been making investments in a Kentucky plant to bring the manufacturing of some products to the United States. The GE case highlights the complexity of calculating the total cost of offshore manufacturing of products for consumers in the United States. For GE, it made more sense to shift to domestic manufacturing. An added benefit for the company came when it was preparing to shift production. The company was able to make design changes to a product that led to faster and less expensive manufacturing.
NPR’s story highlights the importance of considering multiple factors when evaluating offshore manufacturing. Rising fuel prices (and thus increasing shipping charges), the cost of labor, and the cost of protecting intellectual property should be considered, as well as less obvious factors such as the potential for increased innovation.
Is your organization considering reshoring? If it is, what are the biggest motivators?
For additional information on re-shoring, check out APQC’s content collection Re-shoring and Offshoring.