Reshoring manufacturing leads to increase in local supply chain services

August 21 2013

For U.S. companies, outsourcing manufacturing and parts of the supply chain to areas like China has been a long standing business tradition. However, this time honored strategy for saving money could be on the way out as new economic shifts are making it more cost effective to create products in our own backyard.

Many experts have been touting this idea over the last few years. The Boston Consulting Group (BCG)—which has been a proponent for the strong future of U.S. manufacturing—released a recent study that shows the impact could be monumental.

There are currently 12 million Americans directly employed by manufacturers. According to the study, by the end of 2020, that number could jump by as many as 5 million workers. That would drop the current 7.4 percent unemployment rate as much as 3 percentage points. This will be helped by the lower energy, labor and supply chain costs that come along with doing business in the U.S.

Harold Sirkin, a senior partner at BCG and co-author of the report, said that this move to bring manufacturing back to the U.S. is a fundamental economic shift. On top of that, it is growing faster than many thought.

Part of reshoring that is not covered in the report is the effect it will have on the supply chain. With products being created locally, it will mean an increase in demand for quality supply chain and logistic solution providers to help companies ship products. Whether it's across the country or the city of Cleveland, ensuring items arrive on time is a critical aspect of business.