Reshoring and the Role of Automation in Modern Manufacturing
Introduction to Reshoring
In recent years, discussions around tariffs and trade policies have emphasized a significant shift: more domestic production in manufacturing. As global supply chains face increasing obstacles and uncertainty, businesses are looking closer to home to meet their production needs. This reshoring movement, however, isn’t a new phenomenon. It has been gradually growing for years, gaining momentum long before recent policy changes made headlines. At the core of making reshoring sustainable lies a critical element: automation.
The Reshoring Surge
The numbers speak volumes. In 2023, the Reshoring Initiative reported over 287,000 manufacturing jobs created in the U.S. through reshoring and foreign direct investments — a staggering increase from a mere 11,000 in 2010. Concurrently, the adoption of industrial robots surged by 88% from 2013 to 2023, according to the International Federation of Robotics (IFR). This correlation highlights that while tariffs may accelerate reshoring, the competitiveness and capabilities facilitated through automation truly drive this movement.
The Caution of Tariffs
Interestingly, manufacturers remain wary of relying solely on tariffs to make major reshoring decisions. The production relocations often demand extensive planning and substantial investment. Companies are seeking enduring competitive advantages rather than fleeting policy advantages. This reality underscores the necessity for automation to embed itself at the heart of effective reshoring strategies.
Labor Shortages: A Critical Factor
A pressing barrier to rapid reshoring is the current workforce capacity. In 1979, U.S. manufacturing employed nearly 20 million people, a figure which has now drastically decreased due to decades of offshoring. Although there has been a recovery of approximately 1.3 million manufacturing jobs since 2010, this workforce still falls short of the requirements to support significant reshoring efforts.
Many manufacturing plants reported constrained production due to labor shortages, especially following the pandemic. In 2022, the “great resignation” led to over 40% of U.S. manufacturing facilities citing labor limitations as a hindrance to their productivity. Without a robust labor market, companies looking to reshore effectively must invest heavily in automation to fill the gaps.
The Automation Surge Amid Labor Crises
The increase in automation adoption amid labor shortages suggests a clear trajectory for manufacturers. In 2022 alone, North American firms ordered a record 44,196 robots, showcasing an 11% growth from the previous year. At HowToRobot, 63% of automation projects were initiated specifically to tackle capacity issues. This growing demand results in backlogs for robotics suppliers, a trend likely to repeat if reshoring accelerates rapidly.
Despite a reduction in workforce, the U.S. manufacturing sector has seen its real value added jump by $1 trillion over the past two decades — solidifying the notion that automation is pivotal in revitalizing domestic production.
Facing the Automation Skills Gap
Yet, having robots alone is not enough for successful reshoring. The expertise and skills to implement and manage these automation systems are often lacking. Research shows many small and medium-sized manufacturers are falling behind in the race to adopt automation, lacking the necessary knowledge to integrate these technologies into their operations effectively.
Bridging this skills gap is imperative for driving successful reshoring initiatives. Companies must look for specialized assistance to navigate the complexities of sourcing and implementing automation in ways that are technically sound, financially viable, and practical.
Automation Expertise: A Game Changer
Companies increasingly recognize the need for proficient guidance in their automation endeavors. Engaging with external experts can help mitigate risks while addressing the automation skills gap. Finding the “automation sweet spot” becomes crucial — achieving substantial process automation at a fraction of the cost of total automation can greatly enhance returns on investment.
One major U.S. manufacturer discovered this principle when automating its cleaning and painting processes. By strategically narrowing the scope, automation costs were reduced by over $1.8 million while maintaining nearly the same operational efficiencies.
Targeted Automation for Competitive Advantage
The key to successful reshoring hinges on targeted automation rather than sheer volume. Many businesses lack the bandwidth to cultivate internal expertise in robotics rapidly, leaving them vulnerable to setbacks when competing against faster-moving rivals.
Countries like China have demonstrated how swiftly automation can propel competitive manufacturing. In just a few years, China has established itself as a leader in automation density due to substantial governmental support, outpacing the U.S. in robot adoption rates.
Making Automation Work for You
Manufacturers must identify where automation can add the most value. Often, these opportunities hide in plain sight — in processes that slow down production or contribute to inefficiencies. Recognizing these gaps may require fresh perspectives and external insights, underscoring the importance of collaboration with automation experts.
One common pitfall in automation projects arises from companies’ difficulties in sourcing the right technologies. The time-consuming process of researching suppliers can stall progress. However, sourcing platforms and advisory services like HowToRobot simplify this process, allowing manufacturers to receive tailored proposals from pre-vetted suppliers.
Moving Forward with Automation
To successfully navigate the reshoring landscape, businesses must prioritize building their automation capabilities. Relying on policy shifts alone is insufficient for long-term competitive manufacturing. Companies focusing on automation will be better positioned to thrive, no matter how trade policies evolve.
As the tools, expertise, and resources to facilitate this transition become increasingly accessible, manufacturers are encouraged to take that first step toward meaningful automation — paving the way for a more resilient and successful future in domestic production.