Backshoring: Just PR, or Long-Term Business Strategy?

27.05.2009

"Keep in mind that even IBM, just two months after its big 'onshore' splash of 1200 jobs to Iowa, announced it was sending 20,000 jobs to India," says Christine Ferrusi Ross, Forrester Research's vice president and research director of sourcing and vendor management.

Ross notes that many companies that engage in offshore outsourcing and that are worried about the public relations fallout at a time when unemployment is so high in the U.S. are likely to keep highly visible jobs in the States. She adds that aside from IBM, there aren't many other companies bringing work back to the U.S., though there's anecdotal evidence that rising energy and transportation costs and declining labor costs in the U.S. are encouraging some manufacturers to do more production state-side. "Particularly in industries where there are concerns about risks. Think about recent scares with lead paint in toys or chemicals in baby formula."

Full Petential, a maker of treats and supplements for dogs and cats, is an example of a U.S.-based company that is planning to produce more of its products at home as a result of recent pet food scares. Currently, 80 percent of Full Petential's product line is manufactured in China. (See: .)

"All of the bad press on the from China has been a bit of a problem for our company," says Dale Greenbury, Full Petential's president. "We work with a very high quality manufacturer, and I am very confident in , but I am tired of fighting the never-ending battle with consumers."

Greenbury plans to continue manufacturing a small portion of its product line overseas, but he's going to bring back the majority of the production work to partners in the U.S. or in-house. And he thinks Full Petential's top line revenue will benefit from the decision.