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Manufacturers Cite Increase in Near-Sourcing

Preliminary findings show that 70 percent of manufacturing executives expect near-sourcing to increase within the next five years.

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(PRNewswire) According to Lisa Anderson, president of LMA Consulting Group, preliminary findings show that 70 percent of responding manufacturing executives expect near-sourcing to increase within the next five years. Survey data was collected from August – October, 2016 and the U. S. presidential election may have an impact on this trend toward near-sourcing.

"I've seen that manufacturers were already considering insourcing to the U.S. and near-sourcing options to Mexico and other closely located countries because of the Amazon effect – the need for rapid response to customer needs," stated Anderson. "Thus, the industry was already moving in that direction prior to the U.S. presidential election. However, since tariffs are likely to increase and bad publicity could easily occur, the impact will probably steer some of those companies towards the U.S. instead of Mexico. In addition to the Amazon effect, I've witnessed a number of companies who poorly planned their outsourcing and off-shoring efforts," shares Anderson.

"They now have experience and data to make better decisions. Since the total cost of importing non-commodity products from Asia is equalizing with what can be achieved in the U.S. or Mexico, near-sourcing becomes a no-brainer when the customer and cash impacts are added to the cost equation. It is also far easier and more successful to communicate and manage when manufacturing is closer to the markets served."

This is the third major research study conducted by LMA Consulting Group, which included a Skills Gap Study and The Amazon Effect research project. With an uptick in manufacturing and continued concerns of the lack of skilled resources to fill new manufacturing jobs, Anderson is initiating a new Skills Gap Survey to assess the necessary skillsets for manufacturing positions.

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