Trends in Outsourcing EMS Highlights Shift in Domestic Appeal

December 30 2020

Over the last couple of years, an important trend in electronic contract manufacturing has emerged that bodes well for the United States. The movement is called "reshoring”, and it refers to companies here in the United States becoming much more interested in outsourcing EMS to a domestic partner. Looking overseas for manufacturing is no longer as viable as it has been in the recent past.

There are a number of reasons for the shift, but the bottom line is that a combination of technological advances in automation, pro-business incentives, and workforce development are bringing home many of the jobs that were outsourced in the past.

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The most important factor for companies who outsourced overseas used to be the cost of labor. It was important enough that companies were able to ignore some of the perceived negatives that came with electronic manufacturing in Asia. Slow lead times, supply chain issues, poor communication, and a poorly-trained workforce all represented challenges for American companies who were doing business overseas. However, those challenges still didn't rise to the level that outsourcing to Asia was bad for business.

The positive cost factors have slowly evened out, meaning the advantages that the United States has in workforce training, faster lead times, and investment in innovation are starting to carry weight.

Protecting IP

Another factor that has led to United States companies bringing electronic manufacturing jobs home is the risk of theft of intellectual property that is all too common when outsourcing overseas. Manufacturing in China over the last decade means putting your IP at risk of inferior copycats making their way to market. Practices that were relatively small problems just two decades ago now represent a big issue for American companies manufacturing abroad, especially in the electronic realm.

Environmental Issues

It's no secret that China has some of the worst pollution issues in the world, and American companies have learned that they need to take that into consideration when choosing to outsource overseas. Environmentally conscious manufacturers can't ignore the problems this presents while still holding themselves up as caring about the planet's future.

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Geopolitical Issues

The last decade has highlighted some of the issues manufacturing in Asia brings about. While relations are good, concerns are low. However, as tensions between China and the world have begun to change, there's an immediate concern since so much of our global critical goods are being produced there. Bringing manufacturing home makes the most sense.

With all things considered, it's no surprise that electronic manufacturing is trending away from outsourcing overseas and bringing lots of good jobs back home. Continued innovation in America and turbulent conditions abroad will only continue to accelerate the amount of manufacturing being restored to the United States. Here at Levison Enterprises we take pride in every project we’re a part of, and it’s why our clients continue to turn to us for electronic contract manufacturing. Our varied industry knowledge, quality processes, and turnkey services will lead to a successful product for your end users. Contact us for an innovative partnership on your next PCBA project.

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Tags: Electronic Contract Manufacturing, Electronic Manufacturing Service