Key Considerations for Relocating Production

With rising tariffs and ongoing shifts in global trade policies, many companies are re-evaluating their manufacturing strategies. The question isn’t just about mitigating immediate costs. It’s about long-term supply chain resilience, operational efficiency, and business growth.

For manufacturers considering whether to shift production to the United States, the decision extends far beyond tariffs. It involves careful analysis of supply chain logistics, labour costs, regulatory landscapes, and the ability to maintain product quality at scale.

Key Factors to Consider Before Moving Production

Before making a decision, here are three critical factors to evaluate:

1. Does shifting production align with your long-term business goals?

Tariffs and trade policies fluctuate, but your manufacturing strategy should be built for sustainability. Moving production to the U.S. might offer short-term relief from tariffs, but will it support your company’s long-term growth, cost structure, and operational efficiencies? Factors such as workforce availability, local supplier networks, and technology investments should weigh into your decision.

2. What impact will this move have on lead times and logistics?

A manufacturing shift affects more than just production. It reshapes your entire supply chain. While relocating production domestically can reduce reliance on international shipping and geopolitical disruptions, it also introduces new considerations:

• Distribution: Will your logistics network support a seamless transition?
• Supply Chain Control: Can you maintain the same level of visibility and oversight?
• Customer Expectations: Will delivery times be impacted, and if so, how will you manage them?

3. How will this affect costs beyond tariffs?

It’s essential to take a broader view. Consider:

• Labour Costs: U.S. labour tends to be higher than in offshore locations. Can automation or efficiency improvements offset this?
• Material Sourcing: Will you need to restructure your supplier relationships?
• Regulatory Compliance: Different states have varying tax incentives, labour laws, and environmental regulations. How will these affect your operations?

Finding the Right Path Forward

Relocating production is a complex, high-stakes decision that requires detailed analysis and strategic planning. Partnering with an experienced contract manufacturer can help you navigate these challenges while ensuring quality, efficiency, and scalability.

At DSM, we work closely with companies to evaluate their best options, providing the manufacturing expertise needed to adapt to an evolving trade environment.

Are you reassessing your global manufacturing strategy? Let’s talk. Contact us at dsmsales@dynamicsourcemfg.com.