Reshoring is the term used to describe bringing manufacturing and services back to the United States from other countries. Increasing domestic manufacturing helps to balance the trade deficits, provides more manufacturing jobs to U.S. workers thus reducing unemployment and helps to foster a skilled workforce. Reshoring also provides many benefits to OEMs and manufacturing companies by reducing the “Total Cost of Ownership.”
A misconception that spurred offshoring was many manufactured products, specifically injection molded plastic parts and CNC machined parts, were cheaper to have made in China or another Asian country. Unfortunately, when offshoring became more popular about 20 years ago, many companies based their sourcing decisions on cost alone, without factoring in the many considerations that add to the total cost of ownership.
A serious movement to increase domestic manufacturing has taken place over the last decade and more recently with the Reshoring Initiative and political efforts.
Total Cost of Ownership
The Reshoring Initiative is more than just a buzzword and talk amongst manufacturers, it’s a real effort by business executives, politicians, Congress and the President of the U.S. to bring jobs, products and services back to the U.S. Specific Executive Orders have been issued such as:
- Executive Order 13788 in 2017, Buy American and Hire American
- Executive Order 13858 in 2019, Strengthening Buy American Preferences for Infrastructure Projects
These Executive Orders are focused on helping companies to shift their collective thinking away from believing that offshoring is cheaper and to realize the many benefits and cost savings of domestic manufacturing.
The total cost of ownership includes many factors in addition to initial costs for mold construction or injection molding production. These additional considerations often increase an initial miscalculated cost of production by 20 to 30 percent. Relative factors that must be considered during sourcing projects include the following:
- Initial Research and Travel
Some companies were spending more on initial research and travel overseas without factoring these costs into their overall production, thus not realizing the true impact to profitability. Some of these costs alone could make offshoring cost prohibitive.
- Language Barrier
Communication with project managers, production and quality engineers is critical during mold construction and project kick offs. A language barrier could result in poor quality, missed deadlines or parts produced out of specifications. These results could add significant costs to the initial calculation of production.
- Quality of Craftsmanship and Materials
The quality of steel sourced for overseas projects may not be of the same, high-quality steel used by domestic manufacturers. High-quality, certified steel grades are necessary to meet high-volume production requirements without tool rebuilds, rework or engineering changes.
The cost of poor-quality materials could mean completely resourcing projects which drastically cuts into profitability. QT Manufacturing uses only high-grade steel to consistently produce high-quality parts.
- Tool Design, Engineering and Analysis
During part or mold design, logistics and language barriers with offshore suppliers negatively affect overall quality and costs of production. With a domestic manufacturing partner, you get quick turnaround time and mold designs that meet your needs for smooth prototyping efforts and production.
QT Manufacturing works collaboratively with our customers by utilizing Solidworks 2020 and Mastercam 2020 CAD software to leave nothing to chance, along with detailed Advanced Product Quality Planning (APQP) procedures.
- Lead Times and Shipping
Lead times are always one of the most important considerations when sourcing production. OEMs that must wait for their tools to ship from overseas or production parts to make it through customs face many challenges with meeting lead times and on-time delivery. Many issues may arise globally that affect delivery, this has been made blatantly obvious during the global pandemic.
In fact, the shortage of PPE and lack of self-sufficiency with U.S. medical equipment during the pandemic brought attention to these and other areas of dependency including technology and defense. Reshoring production back to domestic manufacturers for local supply chains is of high focus for U.S. companies and the government.
- Quality Inspections and Testing
Quality inspections and testing are critical functions of product development. All of the considerations of offshoring such as the language barrier and barriers to quick shipment ultimately affect quality. With a domestic manufacturer, OEMs should have assurances of a quick response and action to their concerns.
QT Manufacturing Provides Reshoring Solutions
QT Manufacturing is your one source for reshoring solutions with injection molding tools, production, and CNC machining. Our customers benefit from our interdisciplinary approach and multiple teams working together for quicker lead times and on-time delivery with high-quality part production.
With a team of highly skilled mold makers working together with experienced process technicians and CNC machinists, we provide turnkey solutions to meet your part production needs. We tackle the complex part geometries other molders shy away from for quality parts with critical dimensions. Let our team of experienced engineers and production specialists help you to evaluate your cost savings with reshoring.
QT Manufacturing follows a strict quality policy as part of our ISO9001:2015 and AS9100 rev D certifications. We can help to rebuild fragile supply chains with as a valued supplier you can count on. Contact us for more information or to learn the many benefits of reshoring with domestic manufacturing and request a quote.