Reshoring and Nearshoring

Several issues of major importance must be taken into consideration when the decision to relocate various aspects of a manufacturing process for a company is contemplated.

The first, and in most instances most important, is ensuring that production cost is, in fact, reduced. Also of import is the convenience of being able to have control over the quality of manufacturing being done while protecting intellectual property and reducing peripheral costs such as that of transporting finished goods. Less tangible, but to some equally important, is the value of keeping production “as close to home” as possible. In an era when the American economy as a whole is being severely challenged, any attempt to bring production jobs back to the Western Hemisphere can go a long way in the realm of creating “good will,” and positive economic effects in this part of the world.

Understanding the importance of both the tangible and intangible aspects of keeping the manufacturing operations and jobs as close to home as possible, The Offshore Group stands ready to “partner” with those manufacturers who see the value of reducing cost by utilizing the readily available work force in Mexico to create a viable scenario for reducing production costs. It is obvious that most companies have the need to minimize their total cost of manufacturing, and this is often achieved with products with high labor content by making them in “low cost labor” countries. Mexico manufacturing is the option that is closest to hom.

To assist those companies that are looking to make the “tough” decisions regarding the reduction of production costs, the non-profit Reshoring Initiative was founded in recent years(www.reshorenow.org).

Although the leadership of the Reshoring Initiative has as its principle goal the repatriation of manufacturing jobs from far flung locales, mainly the Far East, it does see economic value to the U.S. economy of some manufacturing returning from the Far East to places like Mexico and Canada. Manufacturing in neighboring countries provides American firms with opportunities to participate in their supply chains that would not be present should the production have stayed in the Far East.

Their “Total Cost of Ownership Estimator,” which provides a free, powerful online tool that can quickly and easily help to uncover costs that might not otherwise come to light in regard to industrial location and site selection decisions.

As companies work diligently to remain competitive and successful in this most challenging economy, they should consider every option in order to make optimal economic decisions that will ensure the perpetuation of their manufacturing success. The services that The Offshore Group makes available to companies to begin their Mexico manufacturing under their Mexico Shelter Plan can be part of the equation that creates success.