Posted July 13, 2021

Reshoring Manufacturing: CNC Machining Options to Battle Supply Chain Issues

Local manufacturing, a CNC machining operation at work

At one time, offshore production was the best choice for many original equipment manufacturers. Due to several factors, overseas machine shops could provide a lot of benefits to OEMs using their services. However, due to several key factors, this manufacturing strategy has lost momentum. This article will look at some of the factors that have led to reshoring manufacturing and CNC machining and why many OEMs now favor domestic machine shops.

The Problem: Reliable Supply Chains of High-Quality Offshore Machined Parts 

Manufacturing grew in countries like China, Taiwan, and Malaysia because they offered  inexpensive production services due to substantially lower labor costs. This price made them an attractive alternative to the rest of the world for parts fabrication. In the United States, many corporations found that they could save capital by using offshore manufacturing services instead of paying higher local production costs.

However, over time this paradigm has changed, and the economic balance in manufacturing is shifting back to domestic services. Most attribute these shifts to technological advancements in manufacturing that reduce the amount of manual labor. Additionally, many countries have experienced recent economic growth and prosperity, leading to rising labor costs in offshore facilities. The following factors contribute to the reshoring of overseas production services:

  • Political unrest: Many original equipment manufacturers hesitate to commit to long-range plans when future relationships with their intended fabricator seem unstable.
  • International trade policies: The unpredictability of tariffs and other trade policies also turn OEMs away as they look for a more economically stable scenario for manufacturing.
  • National holidays: Some countries will shut down for days for national holidays, complicating long-range production planning.
  • Global emergencies: As seen with the COVID-19 pandemic, overseas manufacturing is sometimes affected more by natural disasters than those closer to home. Some offshore manufacturers had significant production slowdowns, or in some cases, complete plant closures.
  • Shipping and storage: Working with offshore production involves more complexity, time, and capital. Offshore production ties up resources in overseas shipping, warehousing costs, inventory costs, and domestic distribution.

These conditions have significantly changed how corporations plan their future production orders. Too often, supply chains of critical components and parts get disrupted by one or more of the problems listed above, and strategic sourcing professionals want a better solution. One answer that seems to make the most economic sense to many companies involves reshoring their manufacturing. The result equals more work for local CNC machine shops, and the next section covers how they accomplish that work.

The Solution: Reshoring Manufacturing with CNC Machining Done Locally 

Domestic manufacturing happens internally or gets outsourced to machine shops. It was once common for manufacturers to have internal machine shops, but that no longer represents the most cost-effective solution. With all of the different manufacturing requirements, the cost of maintaining an experienced staff, and keeping pace with all of the applicable standards and technologies, running an internal machine shop is expensive. Operating a large-scale machine shop with a mixture of different CNC mills and lathes can easily cost millions dollars annually. Instead, partnering with domestic machine shops set up to manufacture as a service often offers the best solution for streamlining an organization’s supply chain.

Manufacturing as a service, or MaaS, combines the capabilities of a local machine shop and Just in Time (JIT) inventory management with the OEM for a more efficient manufacturing model. With the machine shop focused on part manufacturing, they will have the resources to maintain a highly trained and certified staff, featuring the most up-to-date equipment and processes. Additionally, with these shops servicing a wide range of customers and technologies, MaaS manufacturers typically employ personnel with more experience and familiarity with multiple fabrication requirements and techniques.

With a MaaS machine shop, original equipment manufacturers can expect the following benefits in contrast to offshore manufacturers:

  • Faster rapid prototyping services due to working directly with the machine shop without language and time-zone complications.
  • Scale from prototype to full production efficiently with a local machine shop that collaborates throughout the entire process.
  • Dependable scheduling without disruptions such as political unrest and extended national holidays.
  • Local deliveries that bypass international shipping complications, time, and expenses.
  • Local JIT inventory management services that minimize or eliminate supply chain problems.

Many benefits come with reshoring overseas manufacturing to domestic services. The following section looks at how the local machine shops prepare to provide these services.

How Your Local CNC Machine Shop is Ready to Supply the Need 

A local machine shop can improve on the services from offshore manufacturers in several valuable areas:

  • Materials: With the volatility of materials costs, companies benefit from the supply chain network connections that a local machine shop offers. They will partner with customers to understand their needs and then work within their supply chain network to find the best materials fit for those needs.
  • Expertise: A domestic machine shop spends time learning a customer’s business goals and the requirements of the part. This relationship allows them to offer helpful suggestions on a design for improvements.
  • Capabilities: Domestic CNC machine shops specializing in MaaS usually have the latest technologies in production equipment and highly trained and experienced staff. This combination assures they manufacture parts at the highest quality and produce them in the least amount of time.

At Plethora, we are proud of our Manufacturing as a Service model of business. We feature the best machinists and engineers working on the best equipment in the industry. We are ISO 9001 certified and are constantly looking for ways to refine and improve our processes and procedures to elevate our capabilities to the highest quality. Our online DFM and quoting systems are ready to receive your data so we can begin working with you on your next project. To get started, upload your design files to Quote My Part or call us at 415-726-2256.
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The Plethora Team

The Plethora team is your go-to CNC manufacturer for hardware done right the first time. We have the tools and experience needed to create high quality custom parts quickly and with precision, whether you need a prototype or production run.

Topics: materials, Design, Manufacturing, finishing, CNC machining, Quality, Supply Chain