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February 2013

The Automation Element of Re-Shoring posted by Chem.Info

“Automation GT is a leader in business process analysis, system commissioning, user training and ongoing support”, state in a recent article.

“There are the typical reasons that a manufacturer considers re-shoring, which Grant says circle around “labor cost and conditions, compliance, intellectual property and time to market.” With labor costs in China rapidly rising, more companies are starting to realize that the total cost of ownership of a given product is not quite as compelling for the off-shore side. The total cost of ownership equation now includes time in freight, which can swing wildly due to delays and weather conditions. Add in unfavorable tax-and-duty situations, and the price outlook gets even worse.

Grant says that many manufacturers have left themselves open to being affected by impossible-to-predict weather conditions, such as the recent Hurricane Sandy, which struck the East Coast with devastating effect in October 2012. The longer the supply chain from point of manufacturing to point of sale, the risk increases dramatically. He says, “One customer recently missed a key market opportunity due to their product sitting on a container ship waiting for east coast ports to re-open.”

While no amount of re-shoring can guarantee that a company’s operations will be free from similar disasters, it does significantly lower the barrier to finding a workaround that will get product where it needs to be to keep customers happy. With everything put together, Grant states, “From a financial and a logistical perspective, automated production in the U.S. just makes sense.”

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