It wasn’t that long ago when outsourcing to emerging markets looked to be the wave of the future. With dramatically lower labor costs available overseas, more and more companies found that offshoring simply made good business sense.
And plenty did just that: In the 2000s, brand-name U.S. multinational corporations—which employ one-fifth of all American workers—cut their domestic workforces by 2.9 million while increasing their overseas employment by 2.4 million.*
Reshoring: the New Offshoring?
In recent years, though, the trend is coming full circle, back to where we originally began—to the United States. Rapidly rising labor costs in countries such as China caused companies to think again about offshoring. Add the complexities already involved with offshoring—cultural differences, increased shipping costs, time zone differences—and the attractiveness of offshoring reached a tipping point.
As companies sought to bring manufacturing operations stateside while remaining cost-competitive, they turned to automation to help lead the new wave of productivity and job growth in the U.S.
“The whole premise for our company is to bring manufacturing back to this country, and our new robot fits perfectly with that master plan,” said Geoff Escalette, CEO of faucet-maker RSS Manufacturing & Phylrich in Costa Mesa, California. Their robot not only makes it possible to increase production speed without buying additional CNC machines, but it also helped them open up 30 percent more capacity on existing machinery.
Automation Helps Companies Keep, Create Manufacturing Jobs
Despite common misconceptions to the contrary, companies are finding that robotics actually help them create new jobs.
“Not only has changing over to an automated production process saved our company from the threat of bankruptcy, saving the jobs of everyone here, it has allowed us to expand our work force,” wrote Marlin Steel CEO Drew Greenblatt.
“Since going automated, Marlin Steel has nearly doubled the size of the work force, adding engineers and automated production specialists to our existing team.”
Same goes for Surface Encounters in Macomb, Michigan, which has robots to thank for allowing them to open additional stores and hire more people, while still offering more competitive pricing.
The company, which specializes in granite counter tops, uses robotics as a “job-enhancement tool,” allowing workers to cut one job while laying out the next. “Not only are we cutting at a higher rate, we’re also more productive with the people we have on the floor,” says general manager Charlie Thiede.
As the trend turns away from offshoring toward reshoring, companies are realizing that robots can help them stay competitive and grow their workforce—while keeping it in the USA.
To learn more about how automation is helping manufacturing companies reshore—creating new jobs in the process—watch for our white paper coming out October 5!
*Source: U.S. Department of Commerce