How Newshoring Can Help Bring Back American Manufacturing
Creating new jobs in the manufacturing sector is the dream of economists, union leaders and workers. The dream is slowly becoming a reality thanks to newshoring, a trend that is leading to a renaissance in manufacturing practices in this country.
Here is a look at what newshoring is and how it is creating hope and jobs in the U.S.
What Is Newshoring?
The concept involves creating jobs by setting up supply chains close to hubs of innovation, invention and design. All are set close to centers of production and consumer demand. These centers of energy create demand for products, from consumers and from those involved in every phase of the manufacturing process.
One good example is Pittsburgh, which fits this pattern exactly. It is close to consumers, positioned within 500 miles of half the population of the U.S. It is accessible to Canada and six states by car or train in less than six hours. Known as Steel City, it has the infrastructure for all phases of manufacturing. Even if parts of the supply chain aren’t close to the city, they are just hours away.
UPS, the package delivery company, held its Newshoring Symposium in Pittsburgh because the region exemplifies the new approach so well. Speakers at the conference discussed how to revive the area’s economy by making the best use of its facilities and manufacturing capabilities. The goal is to couple these capabilities with the collaborative energy of creatives, startups and people who know how to get the best from advanced hardware and software. This multi-pronged approach is breathing new life into the manufacturing process, not just in Pittsburgh but all over the country.
Advantages for Business Owners Lower costs have driven American manufacturing overseas over the last 60 years. But overseas labor costs are rising everywhere, even in places like China and Korea. This is leveling the playing field for global manufacturing.
Shipping costs are rising, which can have a dramatic effect on the final cost of the product by the time it gets to market. Duty fees and custom charges also add to the overall cost.
Assuring quality control is much harder in foreign countries. Complaints about lower quality over the last decade have increased. This impacts a company’s bottom line because of returns and bad ratings scaring off potential buyers.
Companies are open to making the switch when they find out how cost-effective it can be for them. New technology available in this country can reduce costs and also provide higher quality materials, a more skilled workforce and better facilities and transportation options.
Made in the USA The companies that are newshoring and reshoring enjoy the prestige that comes with labeling their products “Made in the USA.” Many feel it sends a message to consumers that the product is high quality and durable, and supports workers in their own towns.
Author bio:
One good example is Pittsburgh, which fits this pattern exactly. It is close to consumers, positioned within 500 miles of half the population of the U.S. It is accessible to Canada and six states by car or train in less than six hours. Known as Steel City, it has the infrastructure for all phases of manufacturing. Even if parts of the supply chain aren’t close to the city, they are just hours away.
UPS, the package delivery company, held its Newshoring Symposium in Pittsburgh because the region exemplifies the new approach so well. Speakers at the conference discussed how to revive the area’s economy by making the best use of its facilities and manufacturing capabilities. The goal is to couple these capabilities with the collaborative energy of creatives, startups and people who know how to get the best from advanced hardware and software. This multi-pronged approach is breathing new life into the manufacturing process, not just in Pittsburgh but all over the country.
Advantages for Business Owners Lower costs have driven American manufacturing overseas over the last 60 years. But overseas labor costs are rising everywhere, even in places like China and Korea. This is leveling the playing field for global manufacturing.
Shipping costs are rising, which can have a dramatic effect on the final cost of the product by the time it gets to market. Duty fees and custom charges also add to the overall cost.
Assuring quality control is much harder in foreign countries. Complaints about lower quality over the last decade have increased. This impacts a company’s bottom line because of returns and bad ratings scaring off potential buyers.
American businesses are also worried about factories and subcontractors stealing intellectual property when they gain access during the manufacturing process.
When companies manufacture their products in the U.S., they gain quality control and peace of mind, and American workers gain jobs.
Newshoring vs. Reshoring Reshoring is the attempt to return jobs to the United States. Unlike newshoring, this process applies to existing products that are currently made overseas. The goal is to make it feasible for products to be manufactured in the U.S. instead. Many jobs moved overseas from the 1950s onward due to high labor costs in the U.S., where it was necessary to pay higher wages, benefits and insurance.
When companies manufacture their products in the U.S., they gain quality control and peace of mind, and American workers gain jobs.
Newshoring vs. Reshoring Reshoring is the attempt to return jobs to the United States. Unlike newshoring, this process applies to existing products that are currently made overseas. The goal is to make it feasible for products to be manufactured in the U.S. instead. Many jobs moved overseas from the 1950s onward due to high labor costs in the U.S., where it was necessary to pay higher wages, benefits and insurance.
Companies are open to making the switch when they find out how cost-effective it can be for them. New technology available in this country can reduce costs and also provide higher quality materials, a more skilled workforce and better facilities and transportation options.
Made in the USA The companies that are newshoring and reshoring enjoy the prestige that comes with labeling their products “Made in the USA.” Many feel it sends a message to consumers that the product is high quality and durable, and supports workers in their own towns.
Author bio:
Andrew Armstrong is a freelance writer, technology enthusiast, and digital strategies consultant based in the San Francisco Bay Area. His recently published works include contributions to Renewable Energy World, BPlans.com, HR.com, and Tech.co. A graduate of U.C. Berkeley in 2003 through the Interdisciplinary Studies Field program, Andrew writes and consults for numerous clients in the field of architecture, engineering, and construction. Follow him on Twitter @kickstartsearch.
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