Reshoring Accelerated: U.S. Manufacturers Choose Domestic Suppliers To Create More Resilient Supply Chains
The unprecedented disruption caused by the coronavirus pandemic reverberated through global supply chains, prompting a seismic shift in business strategies. A noteworthy response emerged: a staggering 69% of American manufacturing and industrial firms expressed intentions in June 2020 to relocate manufacturing and sourcing operations back to the United States. This marked a substantial increase from the 54% reported in February of the same year.1
Conventionally, offshore manufacturing and sourcing have lured companies with alluring advantages, ranging from reduced labor costs to more profitable final products. Yet, the pandemic-induced supply chain vulnerabilities that impeded the seamless flow of commerce have cast doubt on the sustainability of offshoring in the new era.
This seismic shift, catalyzed by the pandemic and compounded by global trade tensions, has ushered in an era where both individual lives and industrial operations have undergone profound transformation. A prominent change has been the significant rise in reshoring efforts.
A Paradigm Shift: Embracing Reshoring
Reshoring, the strategic repatriation of domestic product manufacturing and sourcing from foreign locations to the United States, offers companies heightened control over supply chains and mitigates the risk of future disruptions. The COVID-19 crisis acted as a catalyst, but it is not the sole factor propelling manufacturers towards reshoring.
Consider the pre-existing trade barriers, such as tariffs and restrictions on raw material imports, which compelled businesses to optimize their supply chains even before the pandemic’s onset. Notably, a Gartner survey revealed that 55% of industry leaders are actively working to bolster supply chain resilience within the next 2-3 years, with around 33% of these respondents aiming to relocate their operations out of countries like China.2
The Quest for Stability and Resilience
A revamped supply chain that embraces domestic suppliers offers numerous advantages. These include consistent access to raw materials, real-time visibility into product development, and swift threat detection mechanisms to ensure uninterrupted operations. Thomasnet’s data reinforces the trend, highlighting companies’ pursuit of North American suppliers that enhance their supply chain resilience.
The Power of “Made In The USA”
Beyond the pandemic, “Made In The USA” has garnered fresh relevance. Beyond historical contexts, the pandemic’s scale and duration have prompted manufacturers to reassess their supply chain vulnerabilities. Rosemary Coates, Executive Director of The Reshoring Institute, underscores the change by stating, “[The pandemic] awoke in manufacturers a newfound understanding of supply-chain risk.” Companies are now shifting their focus towards reducing disruptions caused by events thousands of miles away from their target markets.3 The pandemic exposed vulnerabilities in just-in-time stocking strategies, necessitating greater preparedness for critical shortages.
Consumer Trends: Propelling the Reshoring Movement
The Reshoring Institute conducted a survey gauging the impact of “Made In The USA” on consumer preferences. A staggering 70% of respondents expressed a preference for American-made products. This supports a trio of significant trends:
- Over 83% of respondents are willing to pay up to 20% more for domestically produced goods.
- More than 46% believe that American-manufactured products excel in quality compared to foreign counterparts.
- Nearly 60% are influenced by the country of origin when making purchasing decisions.
Embracing the Future with Quickparts
As companies pivot towards reshoring and domestic supply chains, Quickparts stands as an adept partner for rapid manufacturing. Our array of services, including injection molding, rapid prototyping, CNC machining, and 3D printing, seamlessly align with reshoring strategies. Engage with our account executives to explore how Quickparts can support your journey.
The ripple effects of the pandemic have propelled the reshoring movement to the forefront of industrial strategy. As businesses forge ahead, resilience, adaptability, and localized strength emerge as guiding principles in the evolving landscape of supply chain dynamics.
1 Thomasnet, “Reshoring is Creating Opportunities For North American Manufacturers,” August 2020.
2 Gartner, “Gartner Survey Reveals 33% of Supply Chain Leaders Moved Business Out of China or Plan to by 2023,” June 24, 2020.
3 The Reshoring Institute, “WATCH: Is the Pandemic Driving Manufacturers Back to the USA?,” November 5, 2020.
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