Some of the inquires we have been getting over the past six months for wrapping machinery are for production lines moving back to the USA. Customers who went to Mexico are coming back for personnel safety as well as productivity reasons. Customers who outsourced to China are seeing transportation costs and productivity are such that producing in the USA is more cost effective.

It is not chauvinism to say that the US cost of production has declined relative to costs to produce elsewhere. In a recent article in Business Week, the founder of the Reshoring Initiative Harry Moser talks about calculating the total cost of ownership. He includes in that cost factors such as intellectual property rights, shipping costs, time and travel to manage and visit suppliers. He also includes factors such as the negative impact of separating manufacturing from engineering at headquarters. Moser claims that using total cost of ownership, the true cost to manufacture in the US is only 12% higher than China. In some cases, it is demonstrably lower. The decline of cheap labor and cheap fuel and the decline of the dollar are increasing the costs to produce in China. Chinese wages have risen 15% a year over the last decade, according to Business Week.
Employee safety is also an issue in some countries. We have customers pulling production out of Mexico because they cannot get their US employees to go there. They are choosing to put more efficient lines in place in the USA. they can do this due to lower costs of capital with today’s financial markets.

If you are interested in considering line efficiency improvements and want to look at how servo overwrapping can enhance your line productivity, please call us at 413.732.4000 or email us at sales@packagingmachinery.com