Time for Onshore Tooling?

In times of political and logistical uncertainty, the benefits of manufacturers offshoring may be reduced. There are now more incentives than previously for companies to bring manufacturing back to the United States.The Coronavirus pandemic has also brought its own set of challenges to sustaining offshore production.

Covid-19 Impact

Since the start of the COVID-19 pandemic, there has been a lot of uncertainty arising out of trade and shipping. Supply chains have been significantly impacted beyond just lock-downs. Concerns about Geo-political issues and disruptions in traditionally reliable air/ocean freight routes have raised valid questions about the value of manufacturing closer to home markets.

Supply Chain

The logistics of offshoring can pose many problems that are exposed with compounding or cascading weaknesses:

• Problems with Shipping – Directly impacting the ability to fulfill orders and achieve cost control, erratic transportation costs and inconsistency can quickly offset the cheaper overseas manufacturing benefits. Manufacturing in the United States offers a consistency where international long-haul air freight has recently seen cancellations and disruptions.
• Trade & Politics – Another issue with offshore supply chain is unstable trade relations. In the current political climate, relations with other countries can give rise to unforeseen tariffs and worse, trade wars that affect the cost of both raw and finished goods.

Now more than ever, businesses have been given multiple incentives to start on-shoring. Between unstable logistics and the ongoing pandemic, it may be a good time to evaluate diversifying manufacturing and even onshoring it.

The Toolroom’s team of experts can assist you with with ways to help mitigate these production risks!