The coronavirus has rattled firms around the world, and this brings to light to many concerns of how we have grown to operate our businesses in the 21st century. One of the biggest questions being raised – as we slowly step out of shutdown and into a reopened economy – is if manufacturers require more security in their supply chains to avoid future setbacks.
The COVID-19 pandemic was unprecedented and will hopefully be the last of our generation, yet it begs the question: should small and mid-size US manufacturers bring their supply chains home?
Reshoring has been a topic of discussion for many American manufactures, even before the landfall of the virus. Some businesses have experienced raw materials and packaging supplies being locked down on vessels with no means of access. These kinds of uncertainties can cause catastrophe for smaller businesses, and many are agreeing that securing their supply chains on American soil would mitigate global volatility risks.
On top of business security, it is also part of our nature as Americans to support American workers and keep jobs occupied here at home. Unemployment numbers have soared, and it is unclear when many of these workers will return to work and if the demand for certain industries will resume to their previous levels.
Here are 9 reasons why US manufacturers should consider bringing their supply chain home:
1. Eliminate Risk of Foreign Policy Disruptions
One of the biggest advantages of moving your supply chain back to the US, is eliminating the possibility of foreign policy disruptions. There is an incredible amount of volatility in the world, and your business does not deserve to get the brunt of it.
2. Yield a Quicker Economic Rebound
If we want to see our economy turn around as quickly as possible, we need to focus our efforts as businesses collectively in the US. When American workers have jobs and American supply chains are fully firing, our economy is proven to be strong.
3. Shorten Distances, Expediting Transportation, Lowering Costs
Many manufacturers see offshoring as a means for cutting the bottom line, and what many overlook is the added costs of transportation and the increase of carrying inventory longer than necessary. The expense of long-distance logistics is now becoming an unnecessary cost of doing business.
4. Quicker Turnaround for Products
In addition to cutting transportation costs, one of the benefits of localizing your manufacturing supply chain is being able to deliver products more quickly to your distribution channels and customers. This leads to happier clients and lower overhead costs in both the short and long run. Modifying your supply chain to turn around products on a more demand-basis can lead to trimmed expenses and better efficiencies.
5. Increase Inventory Control
When you keep your inventory close to home, it is far easier to manage, not to mention, it eliminates expensive trips overseas to check in on your operations! By bringing all your supply chain back to the US, you can have better sight on what is going on within your business. Better management of inventory will allow you to get lean and enhance your operating productions.
6. Tax Incentives
With the turbulence of trade affairs between the US and China, there are talks of additional incentives for businesses moving parts of their production from overseas to the United States. With these discussions, now might be the best time to consider bringing your entire supply chain home.
7. Improve Brand Perception
Giving your products the “100% Made in America” stamp of approval really makes a difference for perceived brand value. If you make your products in the US, avoid devaluing your brand by putting them in a box stamped “Made in China” on the side. This will cause confusion and negate the whole objective of producing in the United States.
8. Support American Workers
Now more than ever, America needs its people working. There has been incredible disruption and those affected need to be able to work to get the economy back on its feet. As American manufacturers, we need to stand by American workers.
9. Support American Supply Chains
In addition to taking care of our American workers, our fellow American manufacturers need support as well. Doing business with foreign vendors, as opposed to domestic vendors here in the US, only prohibits growth and proliferation for the American economy. If we want to see the American economy boom like it used to, we must take this opportunity to rebuild quality, close-to-home manufacturing now.
Considering the impact of coronavirus and the consequential fallout, now may be the best time to bring your entire supply chain to the United States. From supporting American businesses and their workers, to increased productivity and financial gains and opportunities for your business, it is a great time to consider moving your production and sourcing back home.
Now is the time to come together as manufacturers and make the United States the production powerhouse that it was at the turn of the 20th century. With technology advancements, fiscal incentives, and motivated workers, we no longer need to outsource pieces of our businesses to other parts of the world. We can do it all efficiently right here on American soil.