Opponents of "big box"retail cite the shipping of manufacturing jobs overseas as one reason to fight the growth of such enterprises. The recent issue of Fortune suggests that a decline in this trend may be in the works.The magazine's September issue reports that the "cost of shipping outsourced goods from China to U.S. customers has doubled in just two years thanks to high oil prices, and labor costs in China are rising sharply." These factors are leading to "talk of a reverse migration of manufacturing from China to the U.S., [which] has been buzzing across union halls and factory floors, corporate boardrooms and Wall Street."
Fortune profiles Wisconsin-based Regal Ware Inc., a 500-employee maker of high-end cookware which discovered that manufacturing abroad has another drawback--"it isn't nearly as efficient as they had hoped." As part of a recent review of its manufacturing processes, Regal Ware managers decided they could solve inventory woes and serve customers better by abandoning a large portion of their ten-year expansion into China." After Regal Ware moved its production back to the U.S., CEO Jeffrey Reigle claims that the company experienced a more flexible supply chain and heightened efficiency.
Though Fortune opines that "plenty of manufacturers will continue looking for ever cheaper places to produce," Regal Ware's experience "suggests that companies need to think beyond simply chasing the lowest cost supplier."
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