Reshoring Manufacturing - An Upward Trend

What is Reshoring?

With companies looking to manage supply chains, reduce risk, and improve sustainability, reshoring is an upward trend. Sometimes called onshoring, backshoring, or inshoring, reshoring refers to bringing manufacturing and services back to North America from overseas. It is the opposite of offshoring (manufacturing goods overseas to reduce manufacturing and labor costs).

Factors Contributing to Reshoring

According to Kearney’s 10th Annual Reshoring Index, their latest CEO survey indicated 96% of CEOs are evaluating reshoring, have decided to reshore, or already reshored. 

Companies filling supply chain gaps of essential products are driving reshoring. The top four industries, as per Reshoring Initiative’s data, are: Electric Equipment (e.g., Electric Vehicle batteries), Computers and Electronic Products (e.g., semiconductors), Chemicals (e.g., pharmaceuticals and rare-earth-based chemicals needed for batteries), and Transportation Equipment.

In addition to improving supply chain management, contributing to the trend of reshoring is, reducing carbon footprint, improved safety, government incentives, and a desire to grow the economy. 

Federal policies such as the Inflation Reduction Act of 2022 (IRA), CHIPS and Science Act of 2022, and Infrastructure Bill are further propelling the reshoring of these industries. Addressing the semiconductor shortage, the CHIPS Act, for example, was enacted to attract investment in domestic semiconductor manufacturing, to improve US competitiveness and innovation, and to lessen future supply chain disruptions. 

Thanks to government incentives, domestic and foreign companies’ investment in green energy has risen. Electric vehicle batteries were the most active product to be reshored/FDI’d (Foreign Direct Investment) in 2022 and EV battery and semiconductor investments accounted for a 53% increase in job announcements. 

Reshoring Initiative’s 2023 Q1 Data Report cites the following factors for companies bringing production back to the United States:

1. Supply chains
2. Government incentives
3. Proximity to customers/market
4. Skilled workforce
5. Infrastructure
6. Impact on domestic economy
7. R&D
8. Image/Made in USA brand

How Systecon Participates in Reshoring

For American companies wanting to onshore this means hiring vendors and manufacturers in the United States.

Systecon participates in reshoring manufacturing with its Ohio-based production facility and labor force. The company started manufacturing pumping systems in 1971 and has since expanded to custom modular utility solutions.

Using a skilled workforce to manufacture utility systems in its West Chester factory, Systecon provides chilled water, hot water, steam, process cooling water, power distribution, indoor skids, enclosures, and other systems.

Offering less risk, and improved quality and safety compared to traditional field-built systems, Systecon manufactures utility solutions for many industries, including semiconductor fabrication, advanced batteries, pharmaceutical, and consumer products. Regardless of which market, Systecon can meet project specifications for companies, including those reshoring.