The Real Cost of Manufacturing in China: Why More OEMs are Reshoring Manufacturing

10 years ago, China offered manufacturing services at a 30% lower cost than the U.S. — a deal that American companies were hard-pressed to ignore.

For years, scores of U.S. manufacturing jobs were suffering the same fate from projects being outsourced overseas.

reshoring-manufacturing-usaBut now, things are starting to change: domestic energy costs are decreasing, Chinese wages are increasing, and the manufacturing market in the U.S. is on the rise.

A recent Washington Post article revealed that manufacturing wages between the two countries have effectively equaled out, with a $1 domestic product costing 95.6 cents in China.

Reshoring is now quickly becoming the preferred option for manufacturers — especially in metal stamping. In addition to the closing cost gap, there are other important reasons why once-overseas projects are starting to come back home.

Better Lead Times and More Warehouse Space

warehouse-inventoryBecause stamped metal part delivery from overseas manufacturers takes between 10 to 14 weeks, customers must make a steep investment in their inventories when opting for offshore manufacturing.

Modern consumers expect faster delivery than ever before — to stay competitive, companies must keep vast stores of products on hand at all times.

Keeping inventories stocked at these levels can be taxing. Besides taking up valuable warehouse space, storing large numbers of products runs the risk of stolen, lost, damaged, obsolete, or wasted goods. Working with domestic manufacturers dramatically shortens lead times, allowing for just-in-time delivery while freeing up valuable warehouse space.

Superior Quality and Performance

inspection-machineDomestic production ensures customers receive the best results for their investment. U.S. manufacturers have access to the industry’s highest quality materials and automation technology.

Furthermore, many domestic metal stampers adhere to stringent quality standards to maintain ISO, AS, and TS-16949 certification.

(See samples of some of the high-quality stamped metal parts we produce in our Sample Gallery)

High-quality materials and strict product quality standards result in extraordinary accuracy. Using cutting-edge machine vision technology, US-based manufacturers regularly produce, assemble, and inspect large volumes with almost no defects.

Greater Flexibility

Working with an overseas metal stamper creates serious limitations in flexibility — if consumers need changes in design, engineering, or volume, turnaround times increase significantly. Once the manufacturer finally completes the work, customers must either pay higher shipping fees to expedite delivery or wait weeks for their final products to arrive.

U.S. metal stamping companies can perform virtually any product revision more quickly and efficiently than their overseas counterparts. Domestic manufacturers are typically involved earlier and more heavily throughout production than overseas companies, providing local consultations about improved processes and better material options to improve the quality and cost-effectiveness of their clients’ projects.

American Independence Renewed

In this month of Independence Day, now is the time to consider the benefits of returning manufacturing opportunities to our shores.

new-green-sealCustomers no longer need to rely on overseas fabricators for the best prices; by working domestically, they can procure high quality, cost-effective parts with fast turnaround times.

ESI’s team of metal stamping experts, located in North Branford, Connecticut, has worked with OEMs across the country and the world. To learn more about how ESI sets the standard for accuracy in manufacturing, check out our case study detailing our use of cutting edge technology to produce high part volumes with zero defects.


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