The trend to outsource manufacturing operations to emerging markets for cost savings has taken a dramatic turn. With rapidly rising labor costs in countries such as China, manufacturers are seeing erosion in the cost advantages of manufacturing overseas. When combined with the complex logistics and added shipping times of offshoring, this has left manufacturers looking for new ways to save costs and increase productivity.
Automation using cost-effective, advanced robotics technologies is helping this shift by enabling companies of all sizes to remain cost-competitive while keeping their manufacturing operations at home.
In a recent report from Boston Consulting Group, BCG senior partner and research coauthor Harold L. Sirkin, stated, "The share of executives saying that their companies are actively reshoring production increased by 9% since 2014 and by about 250% since 2012. This suggests that companies that were considering reshoring in the past three years are now taking action.”
In the BCG survey, 56% of respondents believe that decreasing costs of automation have improved their product competitiveness, and 71% believe that advanced manufacturing technologies will improve the economics of localized production. Nearly three-quarters (72%) said they will invest in additional automation or advanced manufacturing technologies in the next five years.
Interestingly, this increase in automation is not expected to have a negative impact on employment. The report shows that 50% of respondents anticipate net manufacturing job creation during the next five years, with 74% citing access to the skilled workforce as a strong factor for moving production to the U.S.
RSS Manufacturing & Phylrich, a faucet-maker in Costa Mesa, CA, is a case in point. CEO Geoff Escalette stated that “The whole premise for our company is to bring manufacturing back to this country. Our new robot fits perfectly within that master plan.”