The subject of reshoring, or bringing manufacturing operations back to the U.S. from overseas, is generating attention, study and debate because of the factors driving the trend. Companies that moved manufacturing offshore in the past decade have been blamed for hefty losses of American jobs, stifling U.S. GDP and increasing the trade deficit. The specter of a reversal is interesting and worth analysis.

In general the impact may be exaggerated since most industries have products that are made with parts sourced from around the globe. Manufacturing processes are often split between on- and off-shore locations to take advantage of favorable talent pools, supply-chain dynamics, labor costs and practices, plus the impact of “clusters” of specific industries in specific locales.  Yet reshoring is a substantial trend and the drivers quite interesting.  We thought to share some of the reasons and thinking based on our vantage point.

Carestream Contract Manufacturing has seen a number of medical device, advanced battery and electronics makers “reshoring” portions of manufacturing and development from Asia to the U.S. Cited benefits include intellectual property protection for core parts of their technology, as well as efficiency in reduction of travel and communication issues in new product development.  Cycle time in new product development programs can be hampered by the “one week per month in Asia” schedule – it is fun, it is effective, but sometimes it is not fast.

In full-scale manufacturing, plants and relationships were set up to be near the customer.  In supply-chain optimization it is often not much of an advantage if materials can be air freighted from a fast-response factory in the U.S.

In most of our processes (precision coating), the benefits of high yield far outweigh labor cost when working with expensive materials.  We typically work with high-value coating solutions and/or base materials. The cost of coating large rolls does not have a high labor component but is highly capital intensive.  Just a few people, even with associated overhead management, maintenance, and systems people operating a coating line, can produce some products at a million square feet per day.

Carestream Contract Manufacturing also takes advantage of existing facilities, which limits customers’ commitment to only the time required. Many of our products are shipped in master rolls (jumbo) to Asia for more labor-intensive operations such as slitting, sheeting, assembly and packaging.  These activities are often performed in locations that are near the end-use manufacturing facilities where the coated materials are used, another benefit.  Less duties and shipping cost are possible with this supply chain also, and IP protection is easier on partially manufactured materials if they cannot be reverse engineered.

Carestream Contract Manufacturing’s roll-to-roll coating operations are all performed in the U.S. As noted we have seen a number of cases where reshoring has resulted in faster and more economic manufacture or development projects.  We would be happy to work with you to take a hard look at the economics.

At Carestream Contract Manufacturing, location matters little. We supply manufacturers all over the world with precision-engineered, coated materials and the reliable quality they need – wherever they are.