What is your U.S. footprint? What are your capabilities? What can you do from a domestic capacity standpoint? What lessons did you learn in your U.S. site selection process?
Such questions come with the journey of adopting a “Made in the U.S.A.” strategy. But as companies today continuously reconsider expanding their U.S.-based operations, they also look at the federal and state levels to weigh the value of the “buzz” that the manufacturing topic received in the supply chain already to understand what they need to be prepared for; and decide if bringing their production to the U.S. from overseas is the right move for them. And one thing is clear: everyone has the best interests for manufacturing in mind.
“At the federal level, the one thing that is really apparent is that there is no single point of contact,” explained Tim Seitz, Senior Vice President, Tax & Trade, Flextronics International Ltd. “There are a lot of different people at the government level and all of them have the best interests in manufacturing in mind—everybody is very interested in helping the manufacturing sector. They recognize that something is happening and everybody is really trying to understand what is driving this so they can identify what they can do to facilitate it.”
And while the U.S. manufacturing growth is still in its early stages, the vested interest it received at the federal and state levels is clear and will only continue.
We heard it in President Barack Obama’s 2013 State of the Union address, in which he referenced the National Additive Manufacturing Innovation Institute (NAMII) in Youngstown, Ohio, and set plans to create more such “manufacturing hubs.” The U.S. Department of Commerce’s SelectUSA Initiative offers a range of incentives and federal funding for new and existing businesses to grow their U.S. footprint—including The Hollings Manufacturing Extension Partnership (MEP) formed to help serve small-and medium-sized manufacturing clients.
“Every country has its own bureaucracy and red tape and federal regulations,” explained Seitz. “When you go into such countries as China, Malaysia and Singapore as a company and you want to set up a facility, you have a single point of contact that you can go to with any issues that come up when you are building a facility; and to coordinate all the permitting that needs to be done. With Select USA, the U.S. government is focused on adopting a single point of contact type of regime in which they are going to have somebody available to us to do that—and we’re really excited about that.”
Is this real?
Simply put, the answer to the question is ‘yes, while it is still in its initial phase, the U.S. manufacturing regrowth is real.’ In the case of Singapore-headquartered electronics manufacturing services (EMS) provider Flextronics International, the company already spent in the neighborhood of $125 million for all of its sites in the U.S. in the past year, at approximately seven million square feet of space and 9,000 employees already, according to Ronald Tarter, Senior Vice President and General Manager for Flextronics. Furthermore, it is in discussions of expanding on the East Coast as well.
And with such factors to consider as increasing wage rates in China, quality of product, IP protection and speed to market, companies must also examine the regional model of manufacturing, as a number of companies today take an open-minded approach to landed cost.
“The bigger and the bulkier the product, the more likely it is to be made near the end customer because of the cost of getting it to where it needs to be,” explained Jonathan Hoak, Executive Vice President and General Counsel for Flextronics. “In talking about Made in the USA products, we’re mainly talking about products that would be made for the end user in the U.S. And that is really important because our market is still four times larger than any other market.”