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Staying ahead of the competition is the constant goal for any business owner, and one strategy that is currently on the minds of many American organizations is bringing operations to the United States from foreign countries, otherwise known as reshoring. Reshoring can shorten supply lines, improve customer sentiment and increase customer satisfaction, but are there risks or drawbacks to making the change?

Recent shifts in the global trade landscape have highlighted the vulnerabilities of extended supply chains. Companies across industries are grappling with fluctuating tariffs, unpredictable costs, and increasing pressure to streamline operations. These challenges create an opportunity to explore reshoring as a strategic move to gain greater control over quality, speed, and innovation. 

Before shopping around for quotes, it’s vital that organizations lay the groundwork for a stateside operation, because successful reshoring depends on thorough planning and future-oriented thinking. Companies can reap the benefits by clearly defining the scope of the work that will be brought from overseas. The first step of making reshore efforts a financial success is to realize that reshoring requires not just a physical move, but strategic planning and resource allocation as well. 

If you have paid attention to the news recently, chances are you’ll see a story about supply chain disruptions for raw materials, pharmaceuticals, industrial parts—almost every high-demand product. At the same time, you’re surrounded by statistical chatter that reshoring is bringing scores of manufacturing projects back to the United States, and as a result, business is pivoted to boom for the foreseeable future. Recent data shows that manufacturing construction spending in the United States has surged dramatically over the past two years, rising from $128 billion to $237 billion in 2024. This 86% increase highlights the growing investments in domestic production, but how are these companies setting themselves up for success?

Reshoring Manufacturing Projects at a Glance

Proposed tariffs and other trade disruptions pose significant risks to profitability and long-term planning. Companies that rely heavily on overseas suppliers may face unpredictable cost increases and delays. 

When clients come to Vollrath® Manufacturing Services for help to reshore their projects, they seldom think beyond moving production but they do need to consider that doing so will also reinforce their business outlook, create new jobs, and balance trade deficits, says Bill Engler, Director of Sales at Vollrath Manufacturing Services. 

Engler believes that best practices steer clients toward a realistic and balanced approach to their reshoring efforts:

“People have a tendency to devalue what they don’t know. Our sales team is trained to hone in on key aspects of costs and logistics that can make or break a company’s future.”
BILL ENGLER, DIRECTOR OF SALES AT VOLLRATH® MANUFACTURING SERVICES

Bringing manufacturing closer to home shortens supply lines, reduces lead times, and minimizes the impact of global disruptions. Reshoring empowers companies to respond faster to market demands while maintaining control over quality and speed, but that doesn’t mean it’s always the right option. 

Consider Manufacturing Capacity

There are quite a few moving parts to reshore a project, not the least of which is what the manufacturer at home is capable of doing for the company. Timeline, scope, and experience level all play into how quickly and effectively the reshore is completed. The best thing companies can do is start their reshore groundwork now. 

Bill Engler explains that there’s no shortage of companies who want assistance with reshoring and come to VMS for quotes, but there is a limit on how many can be effectively relocated:

“We have a lot of projects that are in the pipeline, not specific to reshoring. Reshoring projects often have longer timelines than anticipated. It’s not as simple as moving tooling and going right into production as tooling might need to be modified. Parts may require a formal approval process and materials resourced. But there are certainly times when a reshoring initiative is the start of a long-term partnership between us and the manufacturer, and those are the types of projects we pursue.”
BILL ENGLER, DIRECTOR OF SALES AT VOLLRATH® MANUFACTURING SERVICES

Time is a huge factor when it comes to reshoring, particularly when navigating tariff-induced cost increases and supply delays. If a project can’t handle simultaneous production and relocation, then it’s likely a better idea for it to stay where it is.

Establish New Product Operations

If reshoring was as simple as moving all the parts, tools, and equipment from one country to another, companies would do it all the time, and profit from it. The hard truth is that it’s not a cheap undertaking, so it’s critical that companies balance the costs of the move with their upstart costs in the United States and their profit margin. The more a company can anticipate and plan ahead in this stage, the more likely the reshore is to succeed.

You’re probably thinking that it didn’t seem like as much of a massive undertaking when you decided to operate in another country. Why is it so hard getting reset at home? When we saw the mass exodus of manufacturing projects from North America in the late 1970s, it was because lax environmental regulations and labor laws balanced the heart-stopping shipping costs against unheard-of profits so that companies and their shareholders came out ahead. The playing field of advantages because of lax regulations has diminished over time because customers expect socially responsible partners. 

Reshoring reverses this process, meaning that companies now have the added challenge to revamp their operation to meet western standards. This can entail reconciling costs to get domestic warehouses and factories back to code, opening new locations, training a new workforce, not to mention creating an inclusive decision-making process that synthesizes data and expertise from all the company’s leadership and stakeholder groups. The good news is that once the company has completed these steps, they’ll see a clear path forward to manufacturing in the United States.

Implement Small Factories

One of the biggest questions a company will have to answer as a manufacturer is where their tooling will go once it’s back on U.S. soil. Remember: It’s not a matter of fitting everything into a new facility or simply remaking new products here for immediate use. A factory in the U.S. is unlikely to have the same configuration as an overseas operation, and the building parameters for tooling are almost certain to change depending on location. Fortunately, this doesn’t have to be a problem; it can be an opportunity if companies take advantage of it.

Since companies will likely have to innovate a new solution anyway, they should consider using smaller factories to localize their efforts, thus preventing a bottleneck. Smaller warehouse and factory lines can more effectively meet supply demands, decrease transportation costs to fulfillment stations, and reduce lead times, creating a more responsive and flexible production model tailored to their needs.

Companies Need to Look at Manufacturers That Utilize Automation

Before a company chooses their location for a new production facility, they should investigate which parts of your operation can be automated. Automation saves companies on overhead costs for labor, quality assurance, materials, and more, but it has to be set up for success to return value to their investment. Moreover, automation levels the playing field for companies that want to reshore their business. According to the Reshoring Initiative, North American manufacturing costs are 20% higher than Europe and 40% higher than China. Automation helps mitigate those costs, but there is a tradeoff. 

As seen with the production crises caused by the pandemic, companies who embraced automation and artificial intelligence were more resilient to workforce and funding shortages. But for reshoring purposes, companies who are not already operating at modern tech standards will have to pivot and do so quickly so that their production costs are reasonable to their profit margin. Otherwise, the massive cost to reshore a business could wind up compounded by the costs of keeping it running. Automation, however, is an investment that will make companies back their money several times over in the long run.

Close Workforce Skill Gaps

For a business to run effectively, it needs a stable workforce. Due to high demand and low supply, manufacturing companies are experiencing a labor shortage that shows no signs of slowing, despite the high unemployment rating caused by the pandemic. Deloitte and the Manufacturing Institute predicted 2.1 million unfilled manufacturing jobs by 2030, resulting from what’s been coined the “generational skills deficiency.” 

How can a company close the gap between the workforce they need and the candidate pool they have available? Investments in training and mentoring. Before the gear ever gets to the United States, a company will need someone who can expertly use it, a professional to manage them, a project overseer, etc. Growing operations is not only a matter of launching production, but also utilizing a team that can drive quality, high production, and offer improvements, all at a higher yearly salary than the company would pay for their overseas team. Much like investing in technology, investing in your workforce makes for a stronger business with a hefty profit margin.

Final Thoughts: Make Your Reshore A Success

Reshoring isn’t about bringing an operation home and starting from scratch. It’s about innovating and synthesizing efforts into a model that optimally functions in the new location. No two manufacturers will ever face the same combination of challenges. At VMS, we believe that a successful reshore is a matter of managing expectations, taking a comprehensive approach, and collaboration between the leadership.

“Our ideal customer isn’t just a buyer. Our ideal customer is an engineer, a manufacturing specialist, or an industry professional looking at the project on a strategic level. They have a complex problem to solve, and that’s the type of client we’re interested in. We work on specific problems that need to be overcome, not one-size-fits-all manufacturing,”
BILL ENGLER, DIRECTOR OF SALES AT VOLLRATH® MANUFACTURING SERVICES

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