American manufacturers that shipped production offshore in pursuit of cheap labor are now considering a reversal of that strategy, driven by the Trump tariffs and logistical complexities of making goods far from end markets. But reshoring is no overnight cure for current pain: It involves multiple considerations and commitment to an expensive, multi-year undertaking.

Without question, the shift in sourcing patterns is real. “This continues to be, by far, the busiest activity level I’ve seen in my career,” says 22-year industry veteran Michelle Comerford. She is project director and leader of the industry and supply chain practice at Biggins Lacy Shapiro & Co. (BLS), a consultancy specializing in site selection and industrial development.

Even before COVID-19, manufacturers were contemplating at least a partial shift away from China, where labor costs were on the rise. But the pandemic, followed by a slew of tariffs imposed by the Trump Administration, triggered the beginning of a widescale migration of production capacity to the western hemisphere.

The decision to relocate a plant to the U.S., however, is fraught with complications. Chief among them is the same factor that drove so much manufacturing out of the country in the first place: labor. Comerford says automation is making domestic production more feasible today, to the extent that it reduces the need for humans on the assembly line. The required upfront investment in technology might be higher, but money is being saved down the line, and operational efficiency is far greater.

Still, humans remain very much in the equation, and one of the big challenges today is finding enough of them who are skilled in automation and robotics — or, at the very least, trainable in those areas. That doesn’t necessarily mean having a four-year degree in computer science, Comerford says, but some level of technical savvy on the part of job candidates is essential.

The presence of the right skills varies among regions of the country. Those with a history of strong relationships with local manufacturers are ahead of the curve, Comerford says. But a complete shift to staffing the facility of the future will take time, requiring a strong educational system — primary, secondary and collegiate — and the support of parents, counselors and other influencers.

Real estate continues to be another big driver of site-selection decisions. Many BLS clients are hoping to find an existing building that can be retrofitted with modern technology. The problem, says Comerford, is that the current inventory of available industrial structures is relatively low. The arrival of COVID-19 led to a pause in the construction of speculative space, and when the pandemic abated, the market turned to structures that were better suited to distribution than to manufacturing.

Finding a greenfield site on which to erect an entirely new building is also a challenge. Prospective builders often face zoning restrictions, especially if they’re seeking to occupy what was previously farmland. Local communities might be opposed to industrial projects out of fears that they’ll bring noise, congestion and pollution — despite what Comerford describes as the “very clean, modern-looking” nature of today’s manufacturing plant.

Proactive local support, in fact, is often key to a manufacturer’s final decision. Many states and cities offer generous tax breaks and other financial incentives, on the condition that the project in question brings jobs to the area.

Even with local community backing, though, a suitable manufacturing site needs access to basic infrastructure. Automation has its benefits, Comerford notes, but it also requires an increasing amount of electrical power. That becomes even tougher to acquire as traditional plants compete with power-hungry data centers, which are springing up around the country to support the growth of artificial intelligence (and, in certain cases, cryptocurrency mining).

At minimum, local manufacturing requires strong transportation links. That means proximity to airports, highways, railroads and possibly ports. Comerford calls this an early criterion of the site-selection process, even before considerations of real estate and workforce availability.

All of this requires an investment that can run into the billions of dollars and require years of design, permitting and construction. “It’s not a decision to take lightly,” Comerford says, “so it’s really critical for a company to be very thoughtful, and consider all factors.”

Nor should a modern-day manufacturing strategy restrict itself to a single source of production. “De-risking” supply chains in uncertain times means dispersing one’s supply base, at least to a certain extent. An offshore alternative, whether in Mexico, Asia or elsewhere in the world, is likely to remain in the cards for most manufacturers — blunting, at least to some degree, the supposed advantages of domestic production.

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