What it takes to reshore manufacturing successfully

Rising labor costs in China and other emerging economies, high supply chain and logistics costs, and wide differentials in the costs for electricity and natural gas in different parts of the world are provoking a fresh round of relocation of manufacturing and production. While some labor-intensive jobs are moving out of China to Southeast Asia or the next emerging low-cost regions, some high-profile manufacturing work is returning to the United States, to the cheers of some who are proclaiming the beginnings of a manufacturing renaissance. Wal-Mart holds supplier conferences to promote Made in USA, and the retail giant encourages manufacturers to commit to producing in the United States by promising to purchase $50 billion more in US manufactured goods in the next 10 years. While the macroeconomic data on comparative labor and factor costs may be compelling, the actual process of reshoring, bringing assembly work back from abroad is hard work. This is especially true when the resources upon which a company draws (the supplier base, the workforce, and even the company's own internal product design capabilities) have atrophied