♠ Posted by Emmanuel in Supply Chain at 10/07/2013 04:16:00 AM
The Boston Consulting Group survey found 21 per cent of a sample of 200 executives of large manufacturers were either already relocating production to the US, or planning to do so within the next two years. A further 33 per cent said they were considering it, or would consider it in the near future.Retailing giant Wal-Mart recently put more emphasis on selling US-made goods for obvious reasons. In difficult times, it becomes harder to justify selling boatloads of goods made elsewhere regardless of cost savings passed on to consumers. There's even a feature trumpeting "Made in the USA" products on their website. With Wal-Mart setting a quota for Stateside purchases, it was perhaps inevitable that the reshoring movement gained even more momentum:
Wal-Mart's new emphasis on U.S. goods spells opportunity for Lip Yow, a Malaysia-born entrepreneur who until recently made everything in China. Mr. Yow's company, AFC Trident Inc., Ontario, Calif., uses contract manufacturers in Shenzhen, China, to make plastic cases that shield smartphones and tablet computers. In April, Trident began production at a small factory in Rancho Cucamonga, Calif. Mr. Yow aims to shift most production from China to the new California plant, partly to appeal to retailers like Wal-Mart.It could be a perverse sort of trade diversion if US retailers expressed trade preferences for buying American despite the economic case not being there. However, it appears that, in certain instances at least, doing so only reinforces the incentives manufacturers increasingly have of making stuff Stateside.
Getting on the shelves of Wal-Mart, the nation's largest retailer, is "very important," Mr. Yow said, showing a visitor his new plant where an American flag hangs from an overhead crane. [Yeah! USA #1!]
Wal-Mart has promised to increase purchases of U.S.-made merchandise by $50 billion, which would work out to an average of $5 billion a year. That affects just roughly 2% of what Wal-Mart spends annually on merchandise at U.S. stores, said Matthew Nemer, an analyst at Wells Fargo Securities. It is less than 1% of the U.S. trade gap in 2012.