More and more companies are reshoring their manufacturing projects, and for good reason. Reshoring can mean shorter lead times, more responsive communication, and more secure intellectual property.
In this article, we take a closer look at some real-life success stories where Molding Dynamics has helped clients move plastic injection molding projects from overseas back to our production facility in Ohio. As we explore below, these projects still sometimes incorporate global suppliers, and reshoring doesn’t have to be an all-or-nothing proposition. The key is finding a sourcing strategy that makes sense for your product, budget, and strategic priorities.
Of course, we recognize that offshore suppliers will be a valued part of the supply chain for many organizations. But we have also heard from many clients who have struggled with hidden costs that eroded any advantage from what appeared to be the lowest bid. Some of the most common issues include:
For a much deeper look at reshoring (and why the U.S. is starting to bring more manufacturing work back home) please see our article here.
The cost structure of injection molding jobs is strongly influenced by tooling costs. In general, U.S. producers can be cost-competitive with the rates for injection molding offered overseas. Tooling, however, is much more expensive and can be substantially cheaper to acquire overseas. In many cases, companies decide to purchase molds in China or another lower-cost market prior to shipping to the United States for domestic production. In other situations, the benefits of working with a domestic tooling provider are worth the potential added cost. For a deeper look at key factors that influence the cost of investing in molding projects, please see our guide to cost calculations here.
The following two scenarios help illustrate some of the complexities associated with real reshoring projects.
In this case, we supported a German parent company that maintains truly global operations. In the past, they maintained a division in Australia that produced for local consumption. After breaking into the U.S. market, a large portion of the product ultimately was sold in the United States. As the U.S. market for the company’s products continued to grow, it ultimately exceeded the usage of the Australian division. With their U.S. sales increasingly outpacing those in Australia, it no longer made sense to ship the majority of their product halfway across the world.
This client worked with Molding Dynamics to move production to our facility in Ohio. Because they were able to ship their existing tooling from Australia, this approach gave this client the flexibility to reposition their global supply chain while continuing to generate ROI on their expensive tooling investment. Today, they produce domestically for the U.S. market while exporting to fill the needs of the Australian market.
An effective reshoring strategy can be flexible, take advantage of existing tooling investments, and adapt to the portions of global supply chains where domestic producers can provide the greatest possible value to their customers.
At the other end of the spectrum, we also work with clients who are deliberately moving to bring every aspect of their supply chain back to the United States. Whether the underlying issue is security concerns, bad experiences with overseas suppliers, or simply a desire to shorten the supply chain as much as possible, these reshoring clients are willing to pay a premium to re-tool projects as necessary. In many cases, this re-tooling is an opportunity to roll out an improved “V2” mold/product.
In one case, we worked with a customer who had recently come under new ownership. The new owners issued a clear-cut directive: all products were to be 100% domestically manufactured, even though that meant investing in hundreds of new molds. Ultimately, their investment paid off. When COVID hit, they found themselves able to readily supply products when many of their competitors could not. While COVID-related shutdowns have subsided, there is still global turmoil that cause supply chain disruption. Sometimes, a cost premium for reshoring is well worth the resilience, stability, and peace of mind that comes with a 100% domestic supply chain.
If you are considering reshoring your injection molding project, we encourage you to reach out to our team to discuss the best path forward. We take pride in our consultative approach to client projects, and our team is always ready to get into the weeds on cost, manufacturability, and overall supply chain strategy.
As the examples above illustrate, our manufacturing capabilities have proven to be a good fit for reshoring production while controlling costs. Our team will take the lead in coordinating with the right supplier to design and ship the required tooling. We are committed to finding the strategy that helps get the most out of your tooling investments while meeting your business requirements (whether that means working with one of our trusted domestic or overseas tooling manufacturers).
Please contact us here to schedule or call, or request a quote using the link below.
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