Wired magazine reports that US factories added 136,000 jobs last year — that’s a lot considering the rate at which we were hemorrhaging them to China.
The article posits that some Chinese factories are becoming backed up with too many requests from the U.S. and that their quality is suffering. When factories become overbooked, they favor their larger clients. So if you’re a smaller company who moved production to China to cut costs, the benefits of that move might not be there any more. Wired shares several examples of small companies that came back to the U.S. after bad experiences in China. The quality kept suffering and they’d have to refile their orders, furthering delays. In the race to have the first product — especially in the electronics industry — time lost can be very costly to companies.
Paying higher wages for American workers, but having a quality guarantee (because the owners can check-up on the factory easily and the factory is less likely to be overburdened) and shorter shipping distances, is starting to be worth it for many American companies. They’re bringing their operations back to the U.S.
This move makes less sense for larger companies that want to make millions of products — but it’s an interesting argument for smaller or mid-size companies: outsourcing is not longer the only smart decision.