Is New Technology Fueling the New-Shoring Trend?

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Innovations in technology are making it easier than ever to manufacture products right here at home. From 3D printing and computer aided design to the Internet of Things and data analytics, modern technology is transforming the way manufacturers think and create.

But something else is transforming, too: production. While many established companies have chosen to produce goods in lands far and away over the years, newly launched start-ups and independent manufacturers are using innovative technologies to keep production all American. This trend, called new-shoring, started to pick up just a few years ago and is now a way of business for many manufacturing newcomers.

So, why this shift from offshoring to new-shoring? It comes down to a couple of important and complicated reasons:

Economics
The cost of overseas labor is rising and international shipping costs are making products more expensive to produce. Naturally, higher costs are inspiring new manufacturers to consider more efficient and cost-effective options…which ultimately leads them to home-based production. A 2015 consumer reports study found that 8 in 10 American consumers would rather buy American-made products than order from a company that offshores.

Here in the U.S., manufacturers can make use of 3D printing and the IoT to design, make, and test prototypes as well as streamline production This saves on time and shipping costs and also makes turning a profit a simpler and quicker process.

Quality Control
When manufacturers take production overseas, it’s incredibly difficult to do any kind of quality control. Offshore production often means relinquishing a bit of control as far as process standards go. This is due not only to distance but also, in part, to communication standards which differ from country to country.

This is where manufacturing at home makes more sense. Manufacturers who keep production local have much more control and can peek in on progress pretty much anytime they’d like. Plus, new technology like the Internet of Things, cloud computing, and data analytics is making it super simple to closely monitor production. From anywhere within the manufacturing facility, or even at home, manufacturers can see how smoothly production is going and if there needs to be a change in the product’s design or manufacturing process.

Design and Intellectual Property
One of the biggest concerns with offshoring is how manufacturers address changes to design or specifications during production. The problem lies in the distance between the designer and the production plant which can put production on hold. In many cases,  American manufacturers have easy access to high end tools, while many overseas production facilities do not.

Additionally, patenting and intellectual property rights are also a concern. A manufacturer’s or inventor’s patent isn’t necessarily in effect overseas which means anyone involved in the manufacturing of a new product can steal or replicate a product design or idea. While this can and does happen in the US, product designers have more protection at their disposal when manufacturing these products in the states, especially since technology is making it simpler to track data. With so much data now available in production facilities, manufacturers can track the movements of particular products, designs, and employees, making it more difficult for theft to occur.

Community
Because the availability of 3D printing has made production of complicated products so much more feasible, manufacturing hubs are springing up all over the country. These hubs, which are often close to big cities, provide up-and-coming manufacturers with a wealth of support for their products and their brands.

In New York for instance, the New York City Economic Development Corporation created the Brooklyn-based Manufacturing Innovation Hub to support the fashion and manufacturing sectors. The purpose is to provide innovators with resources like machinery and Internet-based communication networks to help them get their products on the market. This project alone created 300 jobs.

Hubs like these are making it possible for designers, manufacturers, and innovators to come together and manufacture locally. In turn, they’re able to find their footing in the industry and make the push toward creating more jobs.

Government
Even the government is making it more attractive to be involved in American manufacturing. In 2012, the Obama administration set out to revitalize the industry by developing ‘manufacturing institutes’. Using the best resources and technology available, these institutes would incorporate the help of industry experts, universities, and government funding to advance America’s grasp on manufacturing.

So, in short: yes, new technology is most certainly playing an integral role in how manufacturers are approaching new manufacturing ventures. New and innovative technologies are not  only makes production easier, but they’re uniting communities to push America’s manufacturing goals forward.

 

Image Credit: NASA Goddard Space Flight Center

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