Introduction
To achieve excellent performance, manufacturing companies have started outsourcing their manufacturing process. Though the United States is considered the powerhouse of manufacturing, it still depends on importing the majority of products from different countries, including India and China.
There is an urgent need for essentials such as N95 masks and other surgical instruments during this pandemic. Still, the United States, instead of manufacturing its products, depends on the other countries for the import. This has led to the instability of the economy. Though it is easier said than done, the US President had ordered that the manufacturing and outsourced work be brought back to the United States due to the pandemic-caused shortages.
Why does the US Depend On Other Countries For Manufacturing And Other Outsourced Work?
The United States neither has all skilled professionals in different fields in one place nor other types of resources such as minerals and ore in one place. To manufacture a product, the US depends on people from different corners of the world.
Since the number of people specialising in various skills is not adequate in the United States, they hire people from other countries to manufacture the products and export them back to the United States.
Reasons Why The Manufacturing And Other Outsourced Work Should Return To The United States?
Returning the products or manufacturing of goods to the original country is termed “reshoring”. Due to the unstable supply chains, delays in shipping and poor product quality, the U.S. started to move the outsourced work back to its country.
Following are the reasons why is it necessary for the manufacturing and outsourced work to move back to the US:
1. Quality of the product can be increased – The quality of the product becomes inferior if it is shipped from other countries due to the delay in export or poor communication and training.
2. They will have their brand – Having a brand will lead to the betterment of its economy, and extra tax will not be charged, which will be charged only on the imported products.
3. The duration of manufacturing and selling the products will be lessened – They can have early decisions based on their customer needs.
4. The customer's demands can be met immediately – It is not always possible that the imported products will satisfy the customers. So having the manufacturing unit in the US can meet this demand and respond immediately.
5. Total cost of the ownership – The profits would be increased as there would be no deduction in the price due to offshoring.
Conclusion
Moving the manufacturing and outsourced work is a cost-reducing strategy applied by the United States in the present times. It is always in the benefit of every country to have its manufacturing units. It is high time that this decision should be made as it will provide a lot more benefits to its citizens.
FAQs
1. What were the problems faced by the U.S. before?
Ans. Huge tax on products, delay in shipping and inferior quality of the products.
2. Will the US bring manufacturing back from which country recently?
Ans. China, because of the huge demand for masks in recent times.
3. Is it a good decision to get back to manufacturing?
Ans. Yes, since it will make them independent and a sustainable economy.
4. What leads to reshoring?
Ans. It is to cause a reduction in the cost of ownership and improve the quality of a product.
5. What is the example of reshoring?
Ans. Shoemaker Clarks moved back to Somerset from Asia.
