The domestic manufacturing industry is the source of a modern-day fairytale. It has gone through quite a transformation since being moved largely offshore in 2008. Current trend-watchers are referring to it as a Cinderella story. Looking at the evidence in front of you, it would be hard to disprove their claim.
So why was this staple of the land of opportunity outsourced in the first place? Let’s find out.
A Brief History of the Fatal Flaws found in Manufacturing
When analysts talk about the “downfall of American manufacturing,” they use words like: import versus export, inflation, lean labor-management, production costs, and quality. The interesting thing is these words aren’t used in the ways you might expect.
In 2008, giants in international manufacturing could be found in countries like China and India. Domestic companies were drawn to international waters for self-authored, nondescript reasons. At the foundation of these arguments is cost. In reality, it all came down to cost. Frankly, these countries offered cheaper labor that offset the cost of transportation and shipping. However, these fair-weather companies were about to learn a hard-wrought lesson: cheaper isn’t always better.
Fast forward almost seven years and the manufacturing picture has fully developed to reveal an entirely different economic landscape. What changed? For starters, inflation in offshore locales has hit the highest levels on record. Add to that the increases in transport costs and reports of continually defective products, and you have a recipe for mass exodus. That’s exactly what’s happened.
Earlier this year, at least 20% of the offshore manufacturing industry has returned to its American roots. While this is good news for our economy and employment prospects, it does raise a few concerns about the sustainability of these prodigal companies.
Survival of the Fittest: Investing in Strategies that Salvage and Sustain
The return of domestic manufacturing is a welcome sight to a struggling workforce, but it is a workforce under construction. The offshore relocations hit the industry hard. In less than a decade, the well-trained, career-minded manufacturing workforce is nearly extinct. To succeed here today, you have to cover the cost of training new, freshly educated recruits.
Retraining isn’t the only problem. Manufacturers that once flourished through an abundance of surplus inventory must learn to do more with less. Lean labor-management is how experts recommend these companies hit the reset button. Only produce and ship products that fill a demand. Keep on-site inventory minimal.
At Advance Funds Network (AFN), we understand that starting over with unconventional strategies means you’ll probably need unconventional funding. An unsecured small business loan has helped the manufacturing migration go smoother. You can draft all the strategies you want, but an unsecured small business loan gives you the ability to decide where you want the money to go and have the money it takes to get there.
AFN can help your business, just like we’ve helped so many others. Contact us today to find out if an unsecured small business loan is right for you.