Will COVID-19 Bring Manufacturing Back to the United States?
Eyebrows have long been raised about the reliability of overseas manufacturing, and it seems COVID-19 might be the straw that breaks the camel's back. The worldwide pandemic pushed these concerns over the edge by revealing cracks in current production methods, meaning that manufacturers are likely going to bring their production practices back to the U.S., as the Trump administration is, “working to make sure [the U.S.] is never reliant on foreign materials again.”
As it was, many companies were relying on overseas partners—specifically China—for their product’s packaging and other non-edible aspects of pet food. When the hysteria took over and trade was shut down, companies that were outsourcing their packaging were faced with severe supply-chain delays. At Global Pet Expo, before the full extent of the severity of coronavirus was known in the U.S., I can't count how many manufacturers regretfully explained they couldn’t show me their latest packaging or griped about the lack of signage in their booth because they were waiting on components to come in from China.
Of course, bringing manufacturing back to the U.S. would raise costs across the board. After all, the biggest driver behind outsourcing production and sourcing practices to other countries is to cut down on costs. Though pulling production back to the U.S. would be a pricey venture for manufacturers (especially during a time where a recession is likely on the horizon), it would ultimately be a long-term investment into a company’s—and the country’s—future.
A resurgence in American manufacturing and sourcing will help stimulate the economy, as a reliance on U.S.-sourced ingredients, in theory, will help small-town America keep their blue collar economies flowing and provide aid to keep family-owned farms. The benefits may end there, however. In terms of creating production line jobs, technological advances have brought robot workforces—who don't need regular paychecks or PTO time—into the fold, meaning the competition for manufacturing jobs just got a whole lot stiffer.
The good news is that if worldwide trade is shut down or severely hindered in the future, companies who’ve already gone through the process of bringing their production home will be in a better position to survive than those that didn't.