Add Fourstar to Your Reshoring Toolkit for Cable or Harness Assembly and Box Builds
It seems that lately, many companies are choosing to move some or all of their operations closer to home. The process involves weighing factors such as labor costs, material costs, customer proximity, product quality, and time to market. To be clear, evaluating manufacturing or service locations is an ongoing process, but with changing exchange rates, expat costs, rising labor costs, and environmental concerns thrown into the mix, the timing and sense of urgency appear to have increased.
Reshoring Is Closer Than You Think!
The reality is that you may have had, or know someone who had both successful and less than successful (to put it mildly) experiences bringing products back smoothly. Having a plan and an experienced partner(s) can help take the sting out of the process. A good reshoring process is essentially a variation of new product introduction (NPI), and can help transition your product much easier. Again, a reputable partner with structured NPI is your best investment for a successful reshoring transition. And you may have those resources—with a reputable reshoring team—in your own backyard!
Reshoring has gained momentum in the last few years for U.S. companies with operations in China. Many companies that saw or expected a cost advantage in China are now moving closer to home due to increased costs overseas. The USA, Mexico, Dominican Republic, and other regions offer a number of total cost benefits, prompting the move back.
What Is Prompting Your Reasons for Reshoring?
As noted, this is a process that requires serious evaluation. Here are two important areas that need to be vetted thoroughly. Take the time to reflect on these and research the answers if you need to. It will make all the difference to re-inform your organization—there are some obvious variables, and more subtle areas of concern that may surprise you during this discovery phase. This isn’t saying that your company’s initial decision of offshore manufacturing was a bad one, but it is worth the time to ensure the next move is a sound one.
1. Assess your intitial motivation
- Why did you offshore initially? Perhaps it was just unit or landed cost, or you were chasing technology and cheap labor. If you have sales in the offshore country, perhaps it was for customer proximity. Any one of these may have driven the move, but some have more staying power than others.
- Why do you want to reshore? Was your time to market too long and communication inefficient due to cultural and language differences? Did product or service quality suffer due to insufficient oversight, training, or operational surveillance? Escalating labor and transportation costs are almost a no-brainer, but what about brand recognition, market perception, and value proposition? One of the underrated benefits is simply being closer to your end customers.
2. What went well and what failed?
This step is often talked about at the water cooler, but rarely analyzed at face value. It is critical to look in the mirror and discuss exactly what you see. It is very rare to have one area or person be the reason to change manufacturing locations, so knowing this reduces finger pointing and allows for more informed forward-based decisions. Think about the following areas and apply the 5 Whys to drill into the detail in each area.
- Cost control
- Skilled workforce
- Government transparency
- Cultural challenges
And this is just a piece of the pie in terms of the elements to consider for making an informed decision to reshore operations.
The Good News
As overwhelming as all this sounds, the benefits of securing a closer location may far outweigh the bumps in the road to get there. Fourstar has a proven track record in helping customers with reshoring and nearshoring operations, as well as NPI. A number of our employees have lived, worked, and traveled in Asia Pacific, Mexico, and other areas. The language portfolio at Fourstar includes English, Spanish, Portuguese, Vietnamese, Cambodian, and Mandarin. We have a very good understanding of the systems, cultures, and languages commonly associated with manufacturing protocols around the globe.
Using our reshoring expertise, we’ve compiled an informative eBook, “Reshoring Manufacturing for Custom Cable Assemblies and Box Builds” that walks you through all the variables you need to evaluate when considering reshoring manufacturing. Download the eBook now.