Last quarter, Tim Cook announced that Apple would invest $100 million into U.S. manufacturing. Although a small portion of Apple’s total net worth, the announcement is a high profile example of the recent onshoring trend which is predicted to be at the forefront of company agendas throughout 2013.
Onshoring, the movement of returning outsourced manufacturing back to the U.S., first began with labor issues in China. China’s low labor costs once compelled companies to outsource production abroad. Today, wages are five times higher than they were twelve years ago and are estimated to keep continue rising at 18% a year according to a recent article in the Huffington Post. Companies were also prompted to reconsider the benefits of offshoring when Chinese workers began to resist poor labor conditions in the form of strikes and suicides. The problem became so serious for Foxconn Technology Group, the largest contract electronics assembler, that they began to automate their operations in China. Operating automation abroad, however, is no more effective than operating automation here in the U.S.
For companies wishing to onshore production, automated robotics will play a key role. CEO and President of Automation GT, Simon Grant, states “we’ve seen a trend with companies wishing to be ‘reshored’. They are not satisfied with the quality of products being produced abroad and managing that from afar is a real challenge”. With automation, companies are able to bring manufacturing back to the U.S., respond to changing market demands quicker, protect Intellectual Property and have total quality control. “From a financial and a logistical perspective, automated production in the U.S. just makes sense” states Grant.
In a time when consumer expectations for superior goods and services continue to grow, operating closer to the demand allows companies to reduce lead times and keep up with the market’s incessantly changing demands. Automation also offers the opportunity to reposition labor to carry out different tasks. For example, an installed Automation GT system allows a worker to advance their career from a machine operator to a machine supervisor while the employer improves productivity and gains in quality control.
The importance of onshoring has been acknowledged by Obama, with his proposal of a tax relief for companies that return jobs to the U.S. Obama also alluded to end the favorable tax treatment for companies who move work overseas, which will encourage the manufacturing pendulum to swing back to the U.S.
Automation GT, based in Southern California, has already begun to respond to the shift. The designer and manufacturer of custom automated systems have offered clients wishing to bring production back to the U.S. a free consultation and review of their line. “We expect to see onshoring really pick up in 2013. We are excited and ready to consult with clients during their transition” states Grant.
About Automation GT
Automation GT design and manufacture machines for applications that are mission-critical and that require exceptional precision and reliability. They have developed a reputation for perfection through design.
Their core competence is built around automation. Combined with focus on design excellence, this has facilitated growth in some of the world’s most advanced industries. Automation GT has long-standing relationships within industries such as the Life Sciences - Pharmaceutical, Biotechnology, and Medical Devices. For more information, please visit www.automationgt.com.