Trends such as innovation, automation, rising foreign labor costs, and
trade wars have resulted in a return to domestic production for many
industries. Although offshore manufacturing still makes sense from a cost
perspective for large runs, the cost differential between foreign and
domestic manufacturing companies for smaller runs is diminishing. Domestic
manufacturing provides many other advantages for smaller and medium-sized
runs, such as a run of fewer than 1,000 PCBs (Printed Circuit Boards).
Shipping Costs
The shipping of products and components within the United States is
considerably less expensive than shipping them from a foreign country.
Additionally, transportation costs within foreign countries are rising
more rapidly than these costs are rising onshore.
Turnaround Times
Manufacturing a product overseas requires more time than manufacturing
domestically while increasing shipping times. When manufacturers ship
products from overseas, the products must go through customs, which
further increases the turnaround time. Delays cost money, and a delay in
clearing customs can negate much or all of the labor costs savings.
Quality Control
Despite a good vetting process for offshore manufacturers, contract
manufacturers and other companies still have less control over inspections
overseas than they do with domestic production activities. Sometimes
quality details slip through the cracks. Lack of transparency in offshore
production situations can sometimes leave the domestic product manager
little choice but to hope products such as PCBs are correctly
manufactured.
domestic manufacturing companies, domestic products manufacturers,
domestic production, manufacturing capabilities, production activities
Collaboration
Long distances, time zones, and language barriers make collaboration
significantly more complicated with offshore manufacturers as compared
with domestic products manufacturers. If the domestic manufacturer is
having problems with the components on the board or something shifting
around, the plant supervisor is only a few steps away from a consultant
engineer.
When problems occur overseas, engineers must deal with them by phone or
the Internet. Because of time zone differences, the problems also may
occur in the middle of the night and the engineer must wake from sleep to
discuss them. This time difference, combined with language and cultural
differences, can lead to costly mistakes.
Labeling
Products manufactured in the United States can be labeled “Made in the
USA.” This label can help with branding by telling consumers that your
company prioritizes domestic sourcing and supporting the national and
local economy. It can also help encourage young Americans to consider
careers in manufacturing.
Intellectual Property
Some large companies have reshored PCB manufacturing for fear of
intellectual property being stolen. Product engineers recently have
engaged in a significant amount of online chatter about reverse
engineering in China.
domestic manufacturing companies, domestic products manufacturers,
domestic production, manufacturing capabilities, production activities
Key Takeaways
Offshore manufacturing is no longer less expensive than domestic
manufacturing. The cost differential is disappearing most quickly for
short runs.
Domestic shipping costs are lower than the shipping costs within foreign
countries. Shipping costs from foreign countries to the United States also
are expensive.
Domestic production has a faster turnaround time than offshore production.
Delays in Customs make turnaround time even longer.
Quality can be controlled better domestically.
Engineers and plant supervisors can collaborate better when they are
nearer to each other.
Domestic manufacturing companies can use the “Made in the USA” label.
The United States provides significant protections for intellectual
property.
Mars International, a global contract manufacturer, is participating in
this trend toward domestic production. While we still offshore larger
runs, we produce short runs of PCBs here. We have full manufacturing
capabilities in-house for short runs or special requests for domestic
production.
Contact us online or by phone at 908.233.0101, and let us help you
determine whether offshore or in-house manufacturing will best meet your
needs.
