Industrial Insight

Reshoring and emerging growth will be an opportunity…. | January 19, 2011

5 Strategies for Growing as a Domestic Manufacturer

By: Derek Singleton

Derek Singleton

ERP Market Analyst at Software Advice Derek recently graduated from Occidental College with a degree in political science. He writes about various topics related to ERP software and covers the manufacturing, distribution, and supply chain management software markets. In his spare time he enjoys training in boxing and martial arts.

ERP Market Analyst, Software Advice
on 1/7/2011

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More manufacturers are bringing production back to North America. We think the three main drivers of this trend are:

  • Increases in the cost of ocean freight transportation, which has increased by as much as 150% since the 2008 lows;
  • Longer product delivery cycles that make domestic manufacturers less responsive to consumer demand; and,
  • Poor production quality standards that have resulted in the delivery of defective goods.

An area of potential for US manufacturing lies in industrial manufacturing. The US still enjoys a competitive advantage in manufacturing machinery such as earth moving equipment, drilling and mining equipment, and high technology. As developing countries seek to industrialize, these products will be in high demand. Domestic manufacturers should exploit this competitive advantage while it is still present.

In 2010, United Technologies, which makes everything from air conditioners to airplane engines, has seized the opportunity to sell products into markets undergoing rapid urbanization. This year, United Technologies reported that their new equipment orders from China increased 15%. Today, a full 60% of their revenue comes from foreign sales. As developing nations urbanize, there is real opportunity for sales growth.

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About author

I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.







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