It's been one year since President Obama asked Steve Jobs what it would take for Apple to manufacture its products in the United States. In his inimitable style Jobs famously replied, "Those jobs aren't coming back."¹ Perhaps Apple's 700,000 jobs manned by foreign workers in Asia, Europe and elsewhere won't ever see U.S. shores again as Jobs predicted. Perhaps the massive scale of manufacturing infrastructure created and honed by Apple overseas in order meet the unprecedented demand for its iPhones, iPads and iPods has made the company's offshoring initiatives impossible to reverse. No one would argue that Apple is a unique beast. In fact, no small part of that overseas buildup was required to accommodate Job's unilateral and erratic decision-making that produced marching orders and deadlines that only an army of quasi slave laborers could meet. 

Apple notwithstanding, Tim Worstall writing for Forbes.com observes, "There's considerable evidence that the past surge of offshoring isn't just slowing down, it's actually going into reverse."²  If his data is in fact correct, the trend may be attributed to multiple factors ranging from delayed time-to-market to an inability to maintain just-in-time inventory to just plain poor quality. It would seem that manufacturers who are now choosing to bring jobs back to the states have learned the hard way that labor costs alone do not always mitigate the rising costs of transportation, poor quality and delay.

Mike Coleman, CFO of Star Engineering, an electronic assemblies manufacturer in North Attleboro, MA, tempers his own optimism with a gut check. "The trade off for higher pricing versus the cost of delays, failed product or need for excess inventory to insure production flow as well as the ability to communicate ideas gives the U.S. onshore manufacturing effort some things to talk about. However, as the Chinese economy continues to grow and the U.S. manufacturing sector remains highly taxed and regulated, the move to produce entire products in China, as seen with the iPhone, is far more likely," shares Coleman.

Continues Star's Coleman, "We certainly can keep the business we have and perhaps pull some small quantity back, but to stop the flow we need help from Congress and we need to work together as manufacturers to be sure what we do is as efficient and forward thinking as it can be. I don't advocate government subsidies -- just get out of the way and let us be competitive and U.S. manufacturers will start working with vendors as partners rather than trying to squeeze them out of reasonable profits. Vendors also need to be more pro-active and understand the supply chain requirements of their customers."

With all that being said, why does an ad agency like ours pay attention to trends in onshoring and offshoring? While offshoring may make "Made in America" stand for "slow" and "expensive", onshoring makes it stand for "quality you can rely on" and "standards you can trust". It means that products and components that cost nominally more deliver substantially higher quality, less long-term maintenance, and help keep the American economy strong. Having China as a partner helping realize some of our most innovative products is healthy. But having American companies bring back manufacturing jobs to the states is invaluable. As advisors to some of America's most innovative manufacturers, we encourage our Clients to use their onshore and offshore capabilities mix to ensure their customers and prospects understand that lowest possible price rarely if ever translates into best overall value. Ironically, "Made in China" may be the best thing that ever happened to "Made in the USA". As people who make a living crafting communications, "Made in the USA" gives us something substantial to work with. 

1 Duhigg, Charles and Bradsher, Keith. "How the U.S. Lost Out On iPhone Work" NYTimes.com, New York Time Publishing Company. 21 Jan. 2012

2 Worstall, Tim. "Reshoring, Onshoring: the Opposite of Offshoring Anyway" Forbes.com, Forbes. 7 Nov. 2011

Star Engineering manufacturers its products in the U.S.