The story commonly told about American manufacturing is one where a proud bedrock of the economy struggles because it is unable to compete with the much cheaper costs of Chinese competitors. Even when consumers want to buy made-in-America goods, they brace themselves for a much higher cost.
However, now that we have lived in the world of off-shored manufacturing for many years, it becomes apparent that American manufacturing is often the better choice for businesses from a purely bottom-line perspective. An initial low cost may be enticing, of course. However, the long-term advantages of American manufacturing listed below can more than make up for the difference.
1. Quality (or, The Hidden Cost of “Cheap”)
When you need to rely on a product to last, choosing quality saves money in the long term. Imagine buying a coat for $20 that falls apart after one season. Compare that to spending $100 on a coat that lasts for more than ten years. Ten years of cheap coats will end up costing twice as much as a single, better quality option.
Typical factories in China are under enormous pressure to keep costs down, and in many cases this affects quality. This can involve substituting lower grade or thinner materials, eliminating quality control procedures, and hiring the cheapest labor regardless of their industry experience. In contrast, an American-based manufacturer will be motivated to maintain a good reputation through quality work and reliability.
Even in cases where some specific parts are made in China to save on cost, when those parts are shipped to an American company they will undergo rigorous quality control inspections before being used.
2. Cost and Reliability of Delivery
Recently, labor costs in China have been rising, cutting into the already razor-thin profit margins of the manufacturers there. Combined with the high cost of international shipping, sending manufacturing overseas no longer offers the initial cost savings it once did. This results in some companies, such as General Electric, bringing production back to the U.S.
Offshored manufacturing is also prone to production delays. This can occur when an order from a larger client might suddenly bump your order further back in the schedule. It can also occur when a miscommunication in planning might go unnoticed for weeks. Having production take place in the same country, without the delay of international shipping, can help companies respond to consumer requests faster and make adjustments sooner.
3. A Dedicated Work Force
Factories in China have a very high employee turnover rate, averaging thirty-five per cent for workers employed six months or more. Part of that is due to a perception that workers are interchangeable. Employees can actually lower production costs for higher quality products. This occurs when they feel they can grow and that their skills are loyalty are rewarded. American manufacturers recognize the value of skilled employees, and they strive to boost profitability by keeping turnover rates low.
These values help your business when dedicated workers are on hand to catch problems on the spot, offer ideas for innovation, and stay in their jobs long enough to develop relationships with your team.
4. Communications and Support
Communication works both ways in manufacturing. The combination of distance, time difference and language fluency can make American manufacturers a more reliable option.
In the early stages of production, you will need to send documentation that includes technical information, including product description, product functionality and test requirements. With a U.S. based manufacturer, there will be less chance of misunderstanding. They can address any questions that arise more efficiently.
In addition, an off-shore manufacturer is less likely to offer comprehensive user manuals, especially if they are not dedicated to making that particular type of product. Customer support also suffers when outsourced, as many have experienced, resulting in the recent return of many customer support positions to the United States in recent years.
5. Warranties and Consumer Protection
Manufacturers operating in the U.S. need to follow strict and clearly documented quality control regulations. This is critical to staying in business and avoiding legal trouble in the future. By selecting a company that offers warranties for their work and is subject to the consumer protection laws of your country, you can have protection for your business and the money you have invested in it.
Products “made in America” will not only please your customers but will also be good for your business.
Best of luck!