We are staying up to date with everything that is happening in the contract manufacturing space. On a regular basis, we follow the industry-leading developments and report it here for our customers and readers.
It’s the same story with many companies who consider contract manufacturing. They grow, begin exceeding in-house production capacities, decide to find a contract manufacturing partner, and realize outsourcing is just too difficult and confusing. This guide will walk you through the first considerations to evaluate, which questions to ask, and how to know contract manufacturing is right for your organization.
For nearly two decades, US manufacturers saw China as an optimum location for assembly operations – but reshoring from China is becoming a new trend. Due to a myriad of factors – from labor prices to fuel costs to infrastructure – US manufacturers are now bringing their operations back home. The trend is reversing. China is no longer considered the better option across the board. Reshoring to the US and especially nearshoring to Mexico are becoming more and more popular.
As simple as it may sound to reduce manufacturing costs, many producing companies are often at a loss. But the plain fact is, it does not matter how popular your product if you can’t sell it at a profit. It pays to understand these key ways to reduce manufacturing costs and increase profitability.
China Tariffs Not to Blame for Manufacturing Shift?
Recent China tariffs are complicating the US-China trade relationship, causing many to rethink their outsource strategy. But there might be more to the story. The tariffs President Trump has imposed against China and their retaliatory tariffs are making things difficult, but there are indications China has been losing manufacturing prior to this.
The ability to reduce production cycle times can be a powerful competitive advantage. A company’s cycle time is a measurement of their efficiency and a bellwether for profitability and competitiveness. However, it’s not easy to reduce manufacturing cycle times, focus on learning how to reduce cycle time, or justify the expense of additional logistics investment without understanding the value. Indeed, the benefits of reducing cycle times can more than compensate.
When US President Donald Trump announced in March that he would be imposing a 25% tariff on imported steel and 10% on imported aluminum – and in May that US allies would not be exempted – it was domestic manufacturing that responded negatively to the news. Recent news indicates US manufacturers may increasingly outsource production to avoid not only the price increase on inputs but also the added cost of exporting goods to countries imposing retaliatory tariffs on US goods.
In spite of a general trend towards less manufacturing in the United States, the US manufacturing sector is doing well. Output is increasing, value is on the rise, and some areas in the US are experiencing significant growth in the manufacturing sector.
What’s New with the New NAFTA Deal?
On occasion, we release press announcements via various press release outlets. For the convenience of our contract manufacturing community, we also publish these press releases here on our website.
“We took a long, hard look at the environmental impact,” according to Steven Pittman, Prince Manufacturing Midwest Region General Manager. That “long, hard look” led to an innovative new process that evaporates water, releasing it harmlessly and cleanly into the atmosphere, rather than releasing chemicals and waste into the water and sewage system.