Moving Back Home

When times are tough people move back home. This is true of college students and the mass reverse migrations occurring from diaspora workforces, but what about from companies?

As shipping and logistic cost increase and deflation rears its ugly head the beneficiary will be localized/American manufacturing. According to a survey by 2008 Archstone/SCMR Survey of Manufacturers the cost of offshoring have skyrocketed since its peak in 2005. Ocean freight have increased 135%, the Chinese Yuan has gained 18% against the dollar and Chinese wages have grown by 44%. The survey went on to find that 40% of manufacturing executives expect a 25% or more in “core” direct costs on off-shored supply. And these are just the costs.

What is not explored is the real total cost of ownership, or TCO in biz speak, that goes into offshoring. As companies explore the true cost of off-shoring, supplier price and terms, delivery costs, operations quality/cost and IP concerns I believe that more companies will insource.

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