Quality Control Improvements from Reshoring

The Cliché of Offshore Quality Has Faded

In the early days of offshoring, many pundits clucked their tongues at the quality of products from Japan, then China, then the greater Asian Rim (South Korea, Philippines, Vietnam, and so on). HermitCrab thinks this gap has not only been closed, but the quality and complexity of products from our Asian trading partners exceeds any claims American Manufacturers may have once had. Worse, we’ve walked away from industries where quality and complexity converge. We do not produce any meaningful amounts of cameras, metals, copiers, flat-screen TVs, solar panels, drones, generic drugs, computers, and chips. Unless one of these producers decides to manufacture these product types in the US under the guise of foreign direct investment (FDI), it’s not likely we will boot up one of these industries from scratch. We cannot get out of our own way.

But Quality Benefits Can Come from Reshoring

As discussed, reshoring refers to the practice of bringing manufacturing operations back to a company's original country from overseas. This trend has gained momentum as companies realize various advantages, especially regarding the quality of goods produced. Here’s how reshoring can improve quality:

Reshoring allows for tighter control over the manufacturing process. With production close to the home base, companies can closely monitor every stage of manufacturing, from raw materials to finished products, ensuring adherence to high-quality standards.

1. Enhanced Oversight and Regulation

One of the primary reasons reshoring leads to better quality is the enhanced oversight capabilities. When manufacturing takes place locally, companies can more readily implement rigorous quality control procedures. This includes:

Direct Supervision: Managers and engineers can be physically present at the manufacturing site, allowing for immediate inspection and quick resolution of any issues that may arise. This management & engineering layer can also be supplied by university partners, Manufacturing Extension Partnerships (MEPs), and industry organizations that provide a repository of information, best practices, and fractional consulting support.

Strict Compliance with Standards: The U.S. has stringent regulations and standards for product quality and safety. Adhering to these regulations ensures that products meet high-quality benchmarks. This is both a blessing and a curse since most offshore manufacturing enjoys less stringent regulations and worker rights rules than the US. This also applies to the nearshore suppliers – Mexico’s regulations are not as stringent as ours. So, while government agencies pat themselves on the back for stacking regulations on domestic manufacturing, the offshore suppliers face a fraction of that burden, thereby saving on costs of manufacturing.

Real-time Adjustments: Any discrepancies or defects can be addressed in real-time, reducing the likelihood of defective products reaching consumers. The advent of Industry 4.0 technology means problems or emerging issues can often be identified and resolved before they manifest into quality control issues that have directly affected product quality.

2. Skilled Workforce and Advanced Technology

Access to a Skilled Workforce: Another significant factor is the access to a skilled workforce:

·        Well-trained Employees: The U.S. workforce is highly skilled, with workers often having higher levels of training and education. This expertise directly contributes to better manufacturing practices and higher-quality outputs. Despite complaints we need to upskill our workforce, training sources and technologies should ensure we have just-in-time skills as needed. HermitCrab frequently points out that China trained most of their massive workforce by plucking them from rural communities, dropping them into a factory, and telling them to “figure it out.”  They did.

·        Continuous Improvement Culture: The culture of continuous improvement prevalent in many U.S. manufacturing facilities drives quality enhancements and innovation. This is prevalent in Aerospace and Defense, where technology leaps are often followed by numerous incremental improvements in quality assurance processes.

Advanced Manufacturing Technologies: The utilization of advanced manufacturing technologies also plays a crucial role:

·        Cutting-edge Equipment: The U.S. is home to some of the most advanced manufacturing technologies and equipment, ensuring more precise and consistent production.  Much of this is dedicated to the advanced manufacturing industries the US is nurturing and holding onto inside the US. Too many times in the past, in an effort to tap into the large China and India markets, manufacturers have traded their intellectual property for access. Once in the hands of manufacturing competition, the IP is used against us. Our government’s weak and toothless responses over the decades have been exasperating. A great article on this theft (particularly from China) is from The SAIS Review of International Affairs. Click Here for the Link.

·        Research and Development: Proximity to R&D centers allows for continuous innovation and improvements in manufacturing processes and product quality. Every major university inside the HermitCrab domain has at least one manufacturing excellence center, such as:

o   North Carolina: NC State Fitts Department of Industrial Engineering: https://ise.ncsu.edu/research/advanced-manufacturing/

o   South Carolina: Clemson University Center for Advanced Manufacturing: https://clemsoncam.com/

o   Georgia: Georgia Tech Manufacturing Institute (GTMI): https://research.gatech.edu/manufacturing

3. Improved Supply Chain and Logistics

Supply Chain Control: Reshoring improves supply chain control in several ways:

·        Shortened Supply Chains: Shorter supply chains reduce the risk of damage or quality degradation that can occur during long-distance shipping. Please see Day 6: Supply Chain Benefits from Reshoring, for additional details on this topic, including a specific case study that shows a 95% reduction in travel distance from reshoring.

·        Reliable Sourcing: Domestic sourcing of materials and components ensures a more reliable and quality-consistent supply chain.  This sourcing growth will generate plenty of new jobs as well as R&D excellence as the sourcing suppliers work to improve their own internal quality control processes.

Faster Response Times: Finally, faster response times contribute to better quality:

·        Quick Turnaround: Faster turnaround times for orders and the ability to quickly adapt to market demands mean that products are fresher and more aligned with customer expectations. The shorter the feedback loop, the faster quality issues are identified and addressed.

·        Customer Feedback Integration: Being closer to the end market allows for quicker integration of customer feedback into product development and improvement cycles.

Conclusion

In summary, reshoring can significantly improve the quality of manufactured goods by allowing better oversight and regulation, leveraging a skilled workforce and advanced technology, and enhancing supply chain control and logistics. By moving manufacturing back to the United States, companies can ensure higher-quality products, greater customer satisfaction, and a stronger competitive edge in the market.

The companies that would most benefit from reshoring need to “outsource, not offshore” to dedicated American-based manufacturing partners who can partner with them to rapidly build out the manufacturing plant needed to give them a domestic source of crucial product groups. These stakeholders include large retail chains, large corporate strategic sourcing buying groups (think hotel companies, such as Wyndham Buying Group or purchasing cooperatives, such as Orgill (www.orgill.com), government agencies, and startups.  The purchasing needs of these large groups can launch a HermitCrab factory by themselves and ensure their quality needs are met and maintained by a US-based supplier. Everyone wins!

Thank you for Reading!

Improvements in quality control are real, but incremental.  Few companies will reshore in the name of better quality, but when companies factor in the massive amounts of resources focused on helping make sure a reshored manufacturing process will survive and prosper, there is a lot of things to cheer about. We hope you enjoyed this article. Come back tomorrow for Day 8: Brand Reputation: How "Made in America" enhances brand loyalty and trust.

Thanks for reading,

The HermitCrab Team