Supply chain resiliency is a top concern for businesses, OEMs, and industrial suppliers across all markets. In recent years, pandemics, extreme weather events, regional conflicts, and other occurrences have significantly impacted global supply chains. Though entirely out of your control, these disruptions and delays can result in lost profits, diminished customer loyalty, and other critical consequences.
One solution to create a more resilient supply chain is utilizing domestic manufacturers instead of relying on overseas facilities. Domestic manufacturing operations, like Aggressive Hydraulics, complete all their work in the USA, minimizing turnaround time and delivering high-quality final products, effectively building supply chains resilient to costly disruptions.
The Risks of Working with Overseas Manufacturers
Starting in the late 1990s, many companies moved their manufacturing operations overseas. This decision was made to reduce overall costs, access a greater variability of manufacturing services, maintain high-volume production runs, and several other reasons. However, in the decades since the initial push for international manufacturing began, several disadvantages and supply chain weaknesses have become extremely apparent:
- Increased Shipping Costs and Delayed Deliveries. Pandemics, conflicts, weather patterns, and other unforeseen upheavals can disrupt global supply chains and negatively affect your business. Additionally, these delays can cause increases in already expensive shipping costs for all goods.
- Cultural and Linguistic Divides. Partnering with overseas manufacturers means an increase in the risk of miscommunications. Varying languages, cultural norms, and time zones can all complicate communications and extend turnaround times.
- Limited Oversight. Overseas manufacturing means less control over the process. You cannot see the quality of work, cleanliness or orderliness of the facility, sustainability or eco-friendliness of production, and overall safety of the workers.
Domestic Manufacturing Partners Provide Better Supply Chain Resilience
While the cost of bringing manufacturing to the USA can seem higher initially, the cost of partnering with overseas manufacturers can be even higher. Between losing customers to costly shipping delays, navigating or paying expensive penalty tariffs, and possibly compromising your final product, the net loss of overseas manufacturing can add up fast.
More than that, many customers specifically look for goods made in America. In a 2020 survey conducted by the Reshoring Institute, nearly 70% of Americans responded that they prefer USA-made products for the USA market. To go even further, over 83% of respondents reported a willingness to pay up to 20% more for Made-in-America components than a cheaper alternative manufactured overseas. This offsets the initial price of a domestic manufacturing partner.
The advantages to using a domestic manufacturer to increase supply chain resiliency don’t end there. By working with USA manufacturers, you can also:
- Control rising logistics costs
- Receive faster fulfillment times and quote responses
- Enhance protection on Intellectual Property
- Take advantage of incentives offered by state and local governments
- Ensure quality and adherence to American regulations and standards
- Support and create jobs that strengthen the USA economy at the local, state, and national levels
- Encourage customer loyalty and build a positive perception of your brand