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Manufacturers Reconsider Moving Production to Asia

Increasing numbers of US manufacturers choose to locate plants closer their customers.

By John McCloud | Updated on February 19, 2008

New findings from AMR Research reveal that increasing numbers of US manufacturers are choosing to locate production and assembly plants closer their customers. In a list prepared for Supply Chain Management Review, the Boston-based firm rank near-shoring as the second most important logistics and supply trend for 2008.

“Our interaction with clients indicates the pendulum is starting to swing away from moving factories to Asia in favor of Mexico and other parts of Latin America and even the US,” says Greg Aimi, one of the firm’s research directors. “The savings aren’t always as great as procurement managers think they’re going to be.”

The biggest problem with off-shoring to the other side of the globe, he explains, is the extreme variability it introduces to the supply chain. There are more logistics considerations involved and a lot of room for misunderstanding. It’s also difficult to predict exactly how long it will take products to reach US distribution centers, and regardless of predictions, the transit time is long. “When you take something that was a 300-mile chain and make it a 12,000-mile chain, there are a lot more potential fail points,” the researcher comments.

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