Bring it Back from China


Many suppliers that ran to China to manufacture are now seeing a path to bring back manufactured parts to the US. This is a direct result of several factors:

  1. Rising costs in China. The growing middle class in China is demanding better wages and benefits.
  2. The inventory cost of parts in transit has become significant. I have always said that this cost was very much understated by most manufacturers in order to justify decisions to start operations in China.
  3. Customers are demanding shorter and shorter lead times. Just a few years ago, it was not on many people’s radar to have one day deliveries, but now it is common. Orders placed in China, that require cargo shipping, can have lead time of 15 or more weeks.This forces suppliers to carry much more inventory in the U.S. to meet customer expectations.

So how do manufacturers tackle the return to the US?   The number one method that we teach at R&R Consultants is design for manufacturing. These techniques take the steps out of the manufacturing cycle. We have been aggressively implementing these techniques on many products with fantastic results. Sure, you could remove these same steps from the China manufactured parts, but you still have the inventory and turn around time problem.




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