America remains a world-leader in manufacturing. However, manufacturing overseas, specifically in China, is generally less expensive. There are several reasons for this, some of which include lower labor costs, less development and engineering related costs, America’s shift to a service-based economy in the 1990’s, and continual high volumes of Chinese production output over the years has acted as a learning curve, yielding high efficiency.
However, manufacturing products overseas such as in China presents a lot of risk. Below are a few reasons why keeping manufacturing in the US should be the preference for established American companies and startups.
Running the risk of being copied and intellectual property stolen:
There are many horror stories about fantastic, patent-pending surefire product ideas making their way to China for manufacturing, only for the inventor to see numerous cheaper knockoffs for sale online at the snap of a finger.
One startup company with a new idea for storing a selfie-stick posted a promo video of the product on their Kickstarter campaign. Less than a week later, knockoffs made in China were available for 1/3 of the price the inventor was planning on selling them for.
If your product(s) have several parts or involves some complexity, it is especially important to try and keep the manufacturing in the United States. Once CAD drawings or a prototype is shipped overseas, you’ll be at risk.
Miscommunication is costly:
You want to be able to communicate efficiently with the people making your product and essentially handling your business’s future. Any changes in design or revisions to materials used will usually extend deadlines. This can create a mess to clean up with investors. A high-quality product made correctly once is cheaper than a low-quality product made two, three, or more times.
A business choosing manufacturing in the U.S. can visit the facility much easier to visit with staff and witness the production cycle.
Having pride in being American made now and in the future:
Surveys come out every year concluding that American’s prefer to buy American-made goods. 95% of Americans favor USA made products, according to The Alliance for American Manufacturing. If there is demand for your product, it is well made, and you include “Made in America” in branding, you’ll be happy with the results.
The future of manufacturing in America appears to be bright. However, manufacturing companies are desperate to find skilled people to fill job openings. Young people have veered away from the industry, in large part, to misconceptions about what a career in manufacturing consists of. It’s important for all of us to show young Americans the importance of the industry and how valuable skilled technicians, engineers, toolers, and other positions are to our country, and that a career in manufacturing can be very rewarding in many ways.
Manufacturing continues to be the backbone of America:
In 2018, manufacturing generated 11.6% of us economic output.
Currently, 8.6%, or 12.75 million people, of the American workforce is employed in manufacturing. Despite those numbers, however, 89% of manufacturers cannot fill job openings.
U.S. manufacturing is the largest in the world. It produces 18.2 percent of the world’s goods. That’s more than the entire economic output of Canada, Korea, or Mexico.