Bringing manufacturing jobs back to the United States, a practice known as reshoring, is touted as a way to strengthen the US economy– and it’s having a ripple effect on sourcing manufacturing talent. As an executive search consultant specializing in manufacturing, I get an insider’s look into this ever-changing global marketplace from key industry decision makers. Recently, I’ve focused on understanding the complex factors driving reshoring. Just as offshoring did not make sense for every manufacturer, neither does reshoring. A nuanced approach is key to understanding how the global market is continuing to evolve and what these changes mean for hiring top manufacturing talent.

Reshoring and the Global Economy: What’s Next?

In the late 20th century, companies rushed to take advantage of cheaper overseas labor costs, with some companies making outsourcing decisions based primarily on production and labor costs. They overlooked concerns like quality control, IP protection problems, and supply chain/logistics challenges. Now, some companies are re-evaluating their decision to offshore. Companies like GM and Boeing have been at the forefront of these efforts, bringing an estimated 20,000 jobs back to the US.

Reshoring offers benefits that go beyond the positive “Made in America” branding. Reshoring can bring manufacturing and engineering together, strengthening lean production and making build-to-order or mass customization easier. For example, a product manufactured in the US may get to market in five days rather than five weeks. For industries with short-order, high-quality products like electrical equipment and components manufacturing, this faster turnaround time can be a critical competitive advantage.

In other industries, however, reshoring may not make smart business sense. Take the steel industry, for example. Thanks to automation, IoT, and a highly-connected supply chain, outsourced goods are inexpensive to manufacture and sell for a high profit. It may also make sense for low-skill, labor-intensive industries to remain offshore. While end-user proximity is one factor cited for reshoring, this proximity can also be achieved in Mexico, a country with more affordable labor wages.

Sourcing Talent for a Global Industry

From our smartphones to our shoes, many of the items we use each day are not “Made in America”– and that’s okay. While some of these items may be assembled within the United States, their component parts are produced elsewhere. Thanks to advancements in IoT and digital automation, companies are able to produce goods faster, safer and more affordably than ever before. IoT sensors, for example, can connect producers in China or Mexico with the assembly team in the United States, streamlining the end-to-end manufacturing process.

Looking forward, there’s no denying that reshoring will continue to be a hot buzzword, but this trend is not right for every company. In today’s global market, it’s not just where a product is manufactured or assembled but who is the talent behind this process. Future manufacturing leaders need both technical expertise in Industry 4.0 and a global perspective to navigate this dynamic industry.

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