10/13/20 2:24 pm

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.