What Are Some Of The Operations Management Practices That Can Help Bring Manufacturing Back To The U.S?


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The following Operations Management Practices should be taken into consideration in order to bring manufacturing back to the US:

● High Labor Costs and Corporate Taxes

This is perhaps is the primary factor why US firms outsource their manufacturing needs to countries in Asia and South America. However, there are several operations set backs from these countries like intellectual property thefts and increase in projected costs from wages to fuel costs makes businesses to reconsider to transfer the manufacturing plants in the US.

● The "Leap before they look" practice

Many US businesses have the tendency to "leap before they look" which means that most of the time, they overlook the possibilities of the manufacturing industries at home. This is owed to the fact that these businesses wants to reduce their operation costs to generate profit.

● Quality and Safety of the Products

A research shows that 24% of the 113 Business Executives asked states that the quality of the products is among the greatest business risk they have to face when the company outsource its operations in China. As such, most of the companies who outsource to China have to double their re-assurance to their customers that their products are safe and free from life threatening chemicals.

● Additional Costs

Many businesses have found out that outsourcing to China, India, and South East Asian countries also means additional costs. These additional costs include freight and for difficult and intricate industrial plants mean additional costs for training the plant workers and contractors. Similarly, additional taxes, tariffs and logistic fees are also encountered which reduces the profit of the company.

● Deliveries

Outsourcing also means increase in delivery prices. This is because the products have to be shipped back to US customers for their consumption. Aside from the increase in delivery costs like fuel and tariff charges, many US businesses found out that "delivery promises" from Asia is at times unreliable.

● Changes in Demand

Business Executives realized that it is easier to meet the change in market demands of its customers if the plant is within the US market. This is because, manufacturing plants within the target market can easily meet the production, delivery and special services demands of its consumers.

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