A shift is underway in the manufacturing industry. Many organizations are rethinking where they produce their goods. In contrast to a long period of offshoring, we are now entering an era of “reshoring” — manufacturers bringing their facilities back into the United States (or North America) from overseas.
The number of manufacturing facilities being built in the U.S. has risen 116% just within the past year. Additionally, 92% of manufacturing executives think positively of reshoring.
The benefits of reshoring include:
- Supply chain resilience
- Controlled costs
- More predictable forecasting
- Reduced delays
Rather than hunt for the cheapest materials or labor, manufacturers are starting to value the security that comes with shortening their supply chains and fabricating their offerings closer to home.
Let’s explore why reshoring is a big deal and some ways you can prepare your business for the changes and come out ahead.
What the Industry is Saying About Reshoring
Reshoring isn’t a random occurrence. The entire industry is carefully considering this new trend and many businesses are realizing the positives outweigh the negatives.
“I’ve always said, this is just economics,” says Kevin Nolan, CEO of GE Appliances. “It’s going to be better and cheaper to make [products] here.”
Chris Snyder, an industry analyst at UBS, notes that this shift in thinking is a big change from years past. In the past, when manufacturers were ready to expand they had one thought. “If we need a new facility, it’s going in China,” he says. But that’s all changing.
Jean Madar, founder and chairman of Inter Parfums, echoes Snyder’s thoughts when explaining why his company is moving their production out of China. “We’re doing this even though China is way cheaper. How good is it to have cheaper components when you cannot get them? For a consumer-products company like us, you need to have super stability in supply,” he says.
Clearly reshoring is here and is going to make an impact, but what kind of impact, exactly?
Why Reshoring Matters for Manufacturers
Reshoring is a direct reversal of the offshoring trend that began in the 1960s. For decades, companies were enticed overseas by lower material and labor costs. At the beginning of the offshoring era, manufacturing accounted for 25% of the U.S. GDP. In recent years, it’s only accounted for 12%.
But evolving economic and geopolitical factors are convincing businesses to bring their production closer to home. One estimate places the impact at an additional $443 billion for the U.S. economy.
This additional injection of money into the economy will come in the forms of jobs, construction, and supply chain investments. Reshoring could have an outsized impact on the entire manufacturing industry and change the way business has been done for decades.
Opportunities exist for companies as more facilities are built and supply chains are reoriented. Supporting these reshoring efforts can be an entirely new initiative for your business — as long as you are able to notice the trend, capture the signals buyers are giving off, and reach them at the exact right time.
Reshoring Offers Real Opportunities — If You Capture the Right Signals
When industries begin to shift like this, the most successful businesses capitalize on change and stay at the forefront of the new landscape. Keeping your finger on the pulse of major changes requires insights into industry trends so you’re not caught unaware.
Buyers and potential customers are performing research about the topics that interest them. They’re:
- Reading industry news
- Searching for keywords related to reshoring
- Poking around your website to understand how you could help them
There’s only one catch: Your sales and marketing teams don’t have insight into those actions if you aren’t using the right technology to capture all of those signals.
With the right platform, however, you can collect this invaluable buyer intent data to gain a clear picture of what your buyers care about, and the direction they’re heading. Compiling the hidden signals your buyers are giving off empowers your business to be prepared for change.
When you know…
- The topics and content your audience is engaging with
- The locations buyers are researching
- More about the new facilities they’re building
- More about the new products they might be creating
… your business has a big leg up on the competition.
There’s no need to wait and hope you catch which way the wind is blowing. You can use digital transformation to your advantage.
Now’s the time to treat your digital operations the same way you treat your physical operations.
Innovation and efficiency are critical to deliver the best possible product to your customers. Bringing this mindset to the technology you use will help you build better relationships with your customers, better understand their needs, and remain at the forefront of your industry.
Conclusion
Reshoring is a real trend with the opportunity to shift billions of dollars in the manufacturing industry. As companies consider moving their operations back home, every business should be prepared to identify opportunities this scenario presents.
