As a leading domestic time-to-market-focused contract manufacturer, Columbia Tech is experienced in helping companies reshore their manufacturing operations.
The Reshoring Trend
In recent years, reshoring has been one of the strongest trends in the manufacturing sector. Reshoring is returning operations to the United States after previously having moved them to another country. Companies undergo this process for a variety of reasons, including improved quality control, stronger protection of intellectual property, and the cost reductions realized when delivering finished products to a domestic market. Escalating labor rates and true understanding of total landed cost in countries to which manufacturing has been outsourced are also strong contributing factors.
Columbia Tech has been at the forefront of the reshoring trend.
Click the image above to read an article in IndustryWeek written by President and CEO Chris Coghlin in 2012.
So many companies have learned the hard lesson about not truly understanding total landed cost (incorporating cost of quality) of their finished product. While it is often intriguing to see a lower “per unit” price, there are many factors that can add up quickly and reduce, or completely eliminate that perceived lower unit price, so it’s important to “peel the onion.”
Some things to consider include the phase in the product lifecycle and demand flexibility requirements, material value versus labor content, IP protection, cost to manage the supplier, travel, import/export expenses, change traffic and inventory management, time zones and communication management, skilled labor requirements, volume, and – most importantly – the cost of missing a market opportunity.
Columbia Tech is well-versed in the reshoring process and has been operating at the forefront of this movement for some time. Understanding the complexities of global supply chains and procurement, our experienced project management, quality and supply chain teams ensure a smooth transition when returning contract manufacturing operations from overseas. Columbia Tech has a strong reputation in the industry working with clients who have engaged the company with the specific intent of re-establishing domestic contract manufacturing operations.
Improved Quality Control with Reshoring Manufacturing
Columbia Tech understands that quality control should be a major factor when choosing a contract manufacturer. As a leading contract manufacturer for innovative companies, Columbia Tech recognizes that the quality of our work is the difference between your success and failure in the marketplace. Fortunately, Columbia Tech has experience not only in contract manufacturing a multitude of complex capital equipment products, but also in manufacturing test equipment systems and providing test services for a broad spectrum of clients, from venture-backed and privately funded start-ups to Fortune 50 companies.
Reshoring Manufacturing Leads to Reduced Delivery and Distribution Costs
Whenever a product is manufactured overseas, finished goods destined to travel back to this country by sea must be brought from the factory to the nearest port, loaded onto a cargo ship, transported across oceans to a port nearer the intended marketplace, unloaded onto a truck or rail car, and then sent off to the final destination. This complex logistical path is not only costly, but it also impedes the ability to make quick adjustments to production demand quite difficult. The issue is exacerbated when product demand fluctuates. If demand increases, your lead time is too long to allow you to take full advantage of market opportunities, or you utilize air freight and lose the perceived savings. When demand dips, you may now be stuck with containers full of inventory you no longer want or need.
When engaging Columbia Tech as your trusted contract manufacturer and engineering services provider, these traditional obstacles become quite simple to overcome. Your product is manufactured in the United States, in closer proximity to your marketplace, keeping your true costs of delivery and distribution to a minimum. Flexible fulfillment and inventory management allows you the ability to meet fluctuating demand, knowing that additional inventory can be made available more rapidly and at a lower cost of ownership.
Protection of your Intellectual Property with Reshoring
When dealing with offshore contract manufacturers, there are countless differences in local laws and regulations certain to have an impact on how well you are protected from piracy of your intellectual property. In many countries, there are simply no effective safeguards at all. There is little prohibiting a manufacturer or its employees from stealing your sensitive information. Overseas manufacturers don’t always have the robust controls or legal system required to enforce your protections and, therefore, worry little about repercussions for piracy or infringements of patents, trademarks, and copyrights. The price of doing business overseas may be too high for innovation companies with valuable intellectual property.
If you are not saving any money, are experiencing long delivery delays, having quality control issues, or any of the other issues that arise when doing business overseas, it may be time to consider reshoring your manufacturing.
Contact Columbia Tech to learn how we can help.