40 Made in the USA Displays that Will Make You Rethink Manufacturing Overseas- Part I

By far the most significant trend in the point-of-purchase display and store fixture industry is companies looking to reshore and nearshore their display production. There is a lot of buzz about it among customers and POP display companies. Pandemic-related supply disruptions and rapidly escalating costs have created a tipping point that has provided frustrated companies with the impetus to look for ways to take greater control over production and delivery. As this trend unfolds, there will undoubtedly be more Made in the USA displays available to brands and retailers.

Our objective in this 5-part blog series is to share examples of displays that we have been making in the USA as a way of showing what is possible compared to relying solely on overseas production. Before we dive into our 40 examples, in today’s post we will set the stage and look under the covers of the reshoring and nearshoring trend. So, what’s driving it?

Lead Times– Lead times have extended not because of longer overseas production times, but rather, because of international logistics delays related to port congestion and equipment shortages. In short, customers are tired of waiting. While growing impatience seems to be the catalyst for the recent moves to reconfigure supply chains, the benefit of reshoring has far more to do with the economics related to time to market rather than the psychic benefits of reducing wait times.

Few companies understand or take the time to calculate the actual cost of delaying time to market. For example, they do not bother to calculate the lost profit associated with pushing off the implementation of a new POP display program. They ignore the true economics of delay and instead focus on the savings they can get by producing a display in China compared to the U.S. The truth is the lost profits associated with delaying the implementation of a POP display program by 60 days, for example, dwarf the savings that a company could realize by taking advantage of lower overseas production costs. Pandemic-related delays have only served to magnify the economic disparity between lost profits associated with longer lead times and unit cost savings realized by lower overseas production costs.

If you are interested in understanding how to think about the real economic consequences related to delays and longer lead times, we would highly recommend that you read our blog “Point of Purchase Displays: How to Get Them for Free.” Warning: this blog post may make you sick to your stomach after you run your own numbers.

Rising Costs– In addition to elongated lead times, continued cost increases associated with overseas production have motivated U.S. companies to reevaluate their supply chains. While accelerating wage growth in China and other overseas production markets is a reality, the U.S. is also seeing significant wage inflation as a result of minimum wage legislation, a supply/demand imbalance between available (or willing) labor and job openings, and excessive government handouts. Therefore, overseas wage growth is not a big factor in motivating companies to reshore.

However, tariffs of 25% on POP displays imported from China do put Chinese manufacturers at a disadvantage, but to date, industry participants have largely survived this tax by passing it on to end users. But now, on top of the tariffs, the industry is reeling from a 500%+ increase in ocean freight over the last 18 months. This has proved to be the straw that broke the camel’s back for companies that have become overly reliant on overseas production.

Global Warming– While longer lead times and rising costs have overwhelmingly been the most important factors for companies who are looking toward Made in the USA manufacturing, the worldwide Global Warming initiative is also playing a meaningful role. In our blog post entitled “Are Recent Ocean Freight Increases a Death Sentence for Chinese POP Display Manufacturers?”, we point out that a single large cargo vessel emits as much pollution as 50 million cars, and 15 of the largest cargo vessels emit as much pollution as all of the cars in the world. That is daunting given that the world’s cargo fleet numbers more than 90,000.

But, in the same way that most people fail to understand the economic implications of delaying time to market, the world is focused on spending billions of dollars to build an electric car industry to combat climate change, when cutting the demand for large cargo vessels by virtue of widespread reshoring would have a bigger and more immediate impact.

Political Uncertainty– Trade tensions between China and the U.S. coupled with an underlying level of global unrest have given many companies pause and raised the level of concern regarding overseas production. While trade tensions and global unrest are nothing new, the fact that they may be on the rise at a time when some of the other factors we have discussed are at play, is enough to introduce an additional level of risk that some companies are not willing to accept.

Quality– Many companies believe that U.S.-produced goods are superior in quality to products that are produced overseas. While that may or may not be true, it is certainly a belief that is widely held by many U.S. consumers. That perception may provide an advantage to some companies who chose to move manufacturing operations from overseas to the U.S.

● Patriotism– Despite the level of divisiveness and domestic unrest in the U.S., there is a groundswell of support by many companies and consumers who believe that as a loyal U.S. citizens, we should be supporting U.S. companies and, in particular, U.S. manufacturing. While support from consumers, companies, and the U.S. government can play a role in supporting reshoring initiatives, that support is likely to be limited by economic realities related to the cost to produce and purchase products in the U.S. In Part I of our series, we thought it was important to lay the groundwork and set the context for the reshoring movement. In in the remaining 4 parts of our series, we’ll share 40 examples of displays Made in the USA.

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