BCG predicts that, with consistent wage increases of around 15 to 20 percent annually, the labor-cost advantage associated with outsource manufacturing to Asia will drop from 55 percent to 39 percent. Rising fuel prices are another concern for off-shoring since cargo fuel costs have nearly tripled in the last decade. Now, factor in the cost of transporting goods, the cost of adding security to protect products and intellectual property, the time wasted going through customs, increasing taxations on imports, and the cost of paying a workforce to manage all of this. Suddenly the benefits of cheaper labor may not yield the benefits planned for.

So, what does this mean for American on-shore manufacturing? With natural gas production on the rise in the U.S., on-shore manufacturers are fueling plants with less expensive energy resources. Between this, and the boom in green technologies and sustainable energy , many American manufacturers are reducing production costs dramatically. With a focus on streamlining efficiency business-wide, American manufacturers are bringing ideal cost-savings to the board, especially in regards to products that are being designed and sold within the country. These new cost savings are making on-shore manufacturing models more appealing.

Improved product quality is also a draw for many companies considering on-shore manufacturing. The automation that more efficient manufacturing systems bring to the table allows for faster innovation cycles, meaning that companies can correct production errors quickly, and even get new products on the market that much faster.

Offshoring is losing ground when you take into account to the speed, agility, and interoperability needed to make efficient business decisions and remain competitive in today’s marketplace. A business’ profits, after all, no longer solely rely on how cheap the final product can be made. There are other global factors that now affect business growth, such as the ability to visualize your entire enterprise’s performance, from internal business function to third party distributers. Added visibility into client needs is also possible.

Bramasol offers consulting services and world-class products to assist companies in the development and optimization their manufacturing and business enterprise.

Just finished an incredibly insightful article on how Predictive Analysis is driving new efficiencies in plant production environments.  We all know that predictive analytics adoption is accelerating.  It is no longer enough to collect, organize, and present historical data that tells us how the organization is performing relative to its goals.  While a complete and accurate picture of our products, people, and financial performance is as important as ever, it fails in its ability to tell us what is likely to happen next.  Data mining and predictive have offered us the promise of such insight, but was inaccessible to most organizations due to cost and complexity.