The Benefits of Having Plastic Molds Engineered and Manufactured in the USA

April 9th, 2021

The COVID-19 pandemic resulted in the collapse of many international supply chains and as a result many manufacturers have had to shift their strategies, looking to reshoring for improved resilience.

Consumer Spending

American consumers spent approximately $710 billion on e-commerce in 2020, translating into an increase of 18 percent for the year. As economies begin to reopen, markets can expect much of the elevated buying levels to persist because consumer buying behaviors have been altered for the foreseeable future, especially in conjunction with additional economic stimulus measures being put in place. A recent report predicts that in 2021, the industrial manufacturing sector will shift to localized production. This shift is driven by the threat of ongoing trade war/tariffs threatening global supply chains, encouraging manufacturers to move production activities closer to customers.[i]

Reshoring

Reshoring is the practice of transferring a business operation that was moved overseas back to the country from which it was originally relocated. One of the primary advantages of reshoring is that it enables your business to tighten its supply chain. Unfortunately, reshoring from countries like China back to the U.S. can be a complicated process. “China is not just a one-size-fits all situation,” explains Tom Jorgensen, President of Southwest Plastics, “Often times companies are unclear on who owns the mold they’ve been using for years in China, and when they go to reshore production, they find the Chinese companies unwilling to send their mold back to the U.S. Therefore, it’s very important to have a clear contract that enforces and maintains ownership.”

Shift to Localized Production

Following the shift in other industries, like agriculture, manufacturing is expected to see an increased shift to localized production. There are various reasons a manufacturer may want to reshore their production to build where they sell: faster times to market, lower working capital, favorable government policies, and increased resiliency. However, reshoring is not a process that can happen overnight, though the urgency to adopt a more localized production system was highlighted over the course of the past year during the COVID-19 pandemic.

Developing Partnerships

In order for reshoring to happen efficiently and effectively, domestic partnerships must be prioritized. For some companies, diversification is key, for others, increasing strategic inventory reserves is another. The 21st century consumer has grown accustomed to, and expects, on-time, as-promised delivery commitments. And studies have even shown, many customers are willing to pay a premium for that expediting process and reliability.  

Economic Policies

Manufacturing Extension Partnerships (MEP) is a national network of specialists across the country who advocate for and assist America's small manufacturers. Recently, the Biden administration committed to expanding registered apprenticeships to train skilled workers via the America Rescue Plan, which may assist American companies in their reshoring efforts. Furthermore, the Coronavirus Aid, Relief and Economic Security (CARES) Act provides fast and direct economic assistance for American workers and small businesses and preserves jobs for American industries. When it comes to handling China, many analysts predict a continuation of some of the Trump-era policies with the new Biden administration, i.e., policies that prioritize American business and manufacturing. Biden may also focus on opening China’s state-dominated economy, rather than just on narrowing China’s multibillion-dollar trade surplus with the U.S.

If your company is considering reshoring your plastics manufacturing to the U.S., Southwest Plastics could be a great partner to have domestically. At Southwest Plastics we fully support our customers every step of the way to ensure a successful outcome to every plastics project. Southwest Plastics is adept at providing the individualized and personalized service needed for correctly manufacturing custom parts. Using the latest technologies and techniques, our reputation for precision molding, quality, service and value are well-known throughout the industries we serve. We have over 55 years of experience and have worked with many companies reshoring to the U.S. Find out more about how we can help you through the reshoring process and into the future of domestic plastics production. Contact us here today.

[i] https://reshoringinstitute.org/five-predictions-for-the-manufacturing-industry-in-2021/