The impact of globalization on the manufacturing sector has been a much talked about issue for several years now in the American media. And rightly so, as the unemployment rate hovers in the 9 to 10 percent range at the national level. Offshore manufacturing poses a dilemma for U.S. corporations. The cost benefit of having goods manufactured in developing countries is difficult to pass up; however, to achieve higher profits, western consumers need to have sufficient disposable income to buy goods. Politicians keep promising additional jobs but they don’t appear to have any real solutions. But that may not be an issue if ‘Made-in-the-USA’ makes a comeback.
The Problems Arising from Overseas Manufacturers
The recession has taken its toll on manufacturers around the world where many companies have simply ceased operations. Small companies in Asia that were accepting overflow orders that larger manufacturers passed on couldn’t continue operating with diminishing demand. With the economy gaining traction and demand increasing, large offshore companies are operating at full capacity and are accepting only the most lucrative orders. And with few small companies to pick up slack, delivery schedules are being extended as well.
The situation is making things difficult for American retailers. Customers are not willing to wait for their products due to scheduling difficulties in another country. As with most consumers, they want their purchases now and are willing to pay a premium. Small retaillers are now searching for domestic manufacturers in order to accommodate the increased demand. The textile industry is a good example of this trend.
In addition, there is still a quality issue to contend with. While companies such as Walmart, Target, and other big name retail outfits can afford to send quality experts to far-flung places in order to ensure their specs are being met on the production line. Small retail operations can’t afford that same luxury. They are instead searching for domestic suppliers where quality is reasonably assured.
Consumers are also making their voices heard. With one in ten workers unemployed, everyone knows someone that is out of a job. For many, purchasing a product with a ‘Made-in-the USA’ tag is their way of supporting domestic manufacturing. They want to see their friends and family working again.
While job opportunities are slim, the entrepreneurial spirit of U.S. citizens is alive and well. The people will decide as to how much offshore products they want to consume. If Made-in-the-USA continues to make a comeback, there will be plenty of opportunity for those willing to capitalize on it. Do you think ‘Made-in-the-USA’ is making a comeback?
