Reshoring Trend Continues to Grow - Modern Distribution Management

Reshoring Trend Continues to Grow

Study: Two out of three manufacturers increased U.S. sourcing in 2012.
Angela

More evidence is appearing that the trend of near-sourcing or reshoring is expanding. More than 70 percent of durable goods manufacturers increased sourcing of materials and services from U.S. suppliers last year, according to buying consortium Prime Advantage’s 2013 Group Outlook Survey.

Even those who aren’t sourcing more from the U.S. are sourcing closer to home. One in five survey respondents indicated they had brought international sourcing closer to the U.S. over the past year, with around 28 percent saying they’ve moved sourcing to Mexico.

The study found gaining shorter lead times to be the most common driver for near-shoring (67 percent), and forty-nine percent listed reducing inventories as a key driver. Better supply chain control (40 percent) and better overall communication (39 percent) were also common motivators.

The total cost of offshoring may also be a factor for some, according to Harry Moser, founder of the Reshoring Initiative. Moser says companies are increasingly considering factors beyond materials prices, such as freight, packaging and travel costs in calculating the total cost of offshoring.

In a recent interview with Manufacturing Revival Radio, Moser said 60 to 70 percent of large manufacturers are placing an increased priority on developing a “total cost of ownership” model to use in making their sourcing decisions.

Despite this, Moser says companies typically ignore these models in favor of basic materials pricing comparison. This can often make the difference between good and bad offshoring decisions, he says, since unseen costs often tip the scales toward local sourcing as the best option.

The Reshoring Initiative website offers manufacturers a "Total Cost of Ownership Estimator" to help them avoid what the website says is a 20 to 30 percent miscalculation in most companies’ price-based offshoring calculations.

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.