Could This Be The Time to Move the US Supply Chain Stateside?
As the world adjusts to a post-pandemic economy, global supply chain problems remain a universal issue, disrupting businesses and crippling an already tenuous economy. We have seen delays at every point in the supply chain, starting with vendors and extending through the manufacturing facilities, retail establishments, and delivery options. Companies are scrambling to receive materials, complete projects, and make on time deliveries. But, could the solution be as easy as bringing manufacturing back to the United States?
What has caused the current supply chain problems?
Many things have led to the issues seen by a suffering global economy. The United States has outsourced manufacturing to other countries, and though many companies claim to do this for financial reasons, they must admit that they are relinquishing control over manufacturing quality, scheduling, and delivery. According to CNN, today’s supply chain issues are the result of four factors:
- Surging Customer Demand
- Labor Shortages
- Overseas Manufacturing Delays.
- COVID-19
Surging Customer Demand
The surging demand for products may stem from workers either working remotely or being unemployed. With nearly an entire year of shut down, people changed their spending habits drastically. Since they could not go out for dining or entertainment, they were able to save the money they normally earmarked for those activities. Vacation funds were banked, and no longer did they spend money on gas or other car-related expenses. People working remotely had more time to schedule and implement repairs and in some cases, plan new home builds.
Consumers have not only saved money by staying home, they have pocketed some stimulus funds to boost their savings. Home appliances, electronics, and construction materials were suddenly in higher demand than ever before. But with manufacturing facilities shut down because of the pandemic, inventory in nearly every category diminished.
COVID-19
As each new variant is announced, the labor market universally shudders, fearing exposure and the unknown. It has either directly or indirectly influenced rising costs in manufacturing, labor shortages, delivery delays, and ultimately inflation.
Labor Shortages
Pandemic related shutdowns have caused, in some cases, permanent reductions in the workforce. Without having the raw materials available, some manufacturers have resorted to lay-offs. As production wanes, so does the labor pool for delivery drivers and services.
There are additional reasons that people are quitting their jobs and moving to other employment segments or remaining unemployed:
Wage concerns
Some workers are resorting to unemployment rather than returning to a job market that does not offer a sustainable wage. This is seen primarily in the hospitality and food service markets, wholesale trade, or other employment categories offering historically low wages.
Lifestyle change
Many workers have decided to change their lifestyle in some way as a result of changes to their employment during the pandemic. These changes include retirement or early retirement, changing the field they choose to work in, and using savings from the pandemic and stimulus payments to prolong their unemployment.
Changes to caregiving resources
Childcare and caregiving segments have suffered greatly primarily because of health issues and low wages. This is forcing many people to opt for more flexible jobs where they can work from home, or to resign from the job market entirely. In a study called: Moms, Work and the Pandemic, the US Census Bureau found data that showed that there were 1.4 million more mothers not actively working for pay in January compared to pre-pandemic levels.
Health Concerns
Some workers have rejected the idea of returning to the workforce out of fear of becoming ill with additional exposure to unvaccinated workers. Forbes cites a December 2020 study, where 76% of workers admit feeling burnout with 37% citing COVID as a major contributing factor.
Overseas Manufacturing Delays
Though the Logistics segment is slowly recovering, the cost of that recovery is staggering. Delays caused by shortages from overseas manufacturers, have had a staggering increase in shipping costs just to get the product from China to the United States. Shipping containers that cost $5000 in 2020, now see prices climbing to over $20,000 in mid 2021. Transportation costs for international shipments could raise shipping costs by up to 25% in the year ahead, dealing a huge hit to the cost of goods in all segments.
Is the shortage over?
While there is a difference of opinion, there still remains some logistical problems with today’s supply chain. However, one thing we can all agree on, is that the supply chain shortages are on the decline. Some supply problems are steadily decreasing, and the cost of retail items have decreased over the high prices of last spring and summer. But though the supply chain has shown an increasing recovery rate, issues still remain.
As we continue to depend on overseas manufacturing, we also exacerbate the lack of control that we have over this supply chain disruption. Though the United States has steadily improved its ability to meet demand, as we continue dependence on foreign parts and products for manufacturing, we will find it difficult to recover from a product pool that we cannot control.
Many of our overseas suppliers have increased their vaccination rates, resulting in a more constant supply chain fill. However, once supplies become more available, costs will remain high for some time. Most experts agree, overseas supply chain issues are contingent on the control of the spread of the virus in Europe and Asia.
One thing is clear: Having faster and more readily available access to the raw materials, manufacturing, and domestic logistics will keep our customers supplied in a more consistent manner. It will provide better paying jobs, help our businesses stay afloat, and give our country some much-needed breathing room.
Companies That Manufacture Stateside
Choosing companies whose products are made in the USA, not only rectifies many of the recent supply chain problems, it also benefits our country as a whole. It can provide employment today, as well as jobs for future generations. Once you begin investing in products made in the USA, you create more need for products made domestically, and the reinvestment benefits the economy.
Not only can we control the quality of goods manufactured in the US, we also can control the effect manufacturing has on the environment. US labor standards are set to provide that a fair minimum wage is met, which is not found in many countries that manufacture products overseas. Choosing companies that provide products that are made in the USA benefits all segments of the supply chain, saving money on distribution costs, providing nearby local sourcing, and pulling from a skilled labor pool.
When you select companies that have domestically produced products, you can expect high quality products at a fair price, with trained personnel that can give the customer service you want. Some great companies that manufacture stateside are:
Elkhart Products
Part of the stock listed company Aalberts, Elkhart Products is a supplier of copper fittings, with locations in Indiana and Arkansas. Elkhart mines, fabricates and manufactures in the United States.
Tindall
Though it ships internationally, Tindall is a US-based provider of prestressed, precast concrete. The company got its start in 1932 as a small concrete manufacturing business operating out of a humble shed in Spartanburg, SC. The Lowndes family purchased the company in 1963, and it has grown to include six precast manufacturing facilities: two in South Carolina, and one in each of the following: Virginia, Georgia, Mississippi, and Texas.
Gridd Low-Profile Raised Flooring System
The Gridd Low-Profile Raised Flooring System by FreeAxez is 100 percent made in the USA and is currently meeting all delivery schedules. If your building project is experiencing delays, and you need a low-profile raised floor system, this can be a great option.
