This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Buzzworthy Benefits of 'Reshoring' Companies

CHICAGO ( TheStreet) -- For years, American companies looking to reduce costs have found savings by looking overseas.

Even those that lamented offshoring's effect on domestic employment couldn't deny its balance-sheet appeal. Once the offshoring trend hit critical mass, anyone who didn't join in was at a huge disadvantage: If all your competitors have moved their call centers to India, how could you afford not to?

But is offshoring always the best choice? A growing movement is questioning the knee-jerk assumption that sending manufacturing and service jobs overseas is the only way to stay competitive. One reason is that the costs of offshoring are rising: fuel prices are up (making shipping more expensive) and workers in developing countries are demanding steadily higher wages.

Proponents of reshoring, as it's called, say that factors other than price should also be taken into account. For Simple Wave, a California housewares company, bringing manufacturing to the U.S. from China had numerous benefits: It made the company more agile in adapting to customer needs; it allowed for better quality control; and it brought a huge amount of positive publicity within its industry.

Just as importantly, it gave employees a sense of pride. "We wanted to do the right thing, and it felt good to make that decision," says co-founder Richard Stump.

7 Companies That Keep on Growing

Simple Wave's signature product is the CaliBowl, a bowl with an inward-curving lip that prevents food from spilling out. When the company was founded in 2008, the decision was made early on to manufacture the rubber bowls in China. "We went to China because that's what everyone else did," says Stump. "It was monkey see, monkey do."

But producing a precisely designed product far from the company's home base turned out to be harder than the founders expected. The curved lip of the bowls was difficult to mold, and quality control became a concern. There were worries about lead times and inventory. When a chocolate company requested 800 CaliBowls on short notice for its store displays, it became clear that it was time to move toward a just-in-time delivery model. "We needed to be able to adapt more quickly," says Stump. "You lose a lot of opportunities if you can't deliver."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs