Industrial Customer Demand and Reshoring

Logistics Management Freight Service Production Concept

Paul Cooke, Rexroth’s new CEO for the Americas, moved from Germany to head the U.S. division of Bosch Rexroth. His take on manufacturing in the U.S. for his company — slated for significant growth this year — is not about American jobs or American pride. It’s about “local for local.” Products for a local market, he figures, should be made near that market.

Modern consumers, Cooke points out, expect to get their goods fast. They expect customization. They expect an agile and responsive company providing customer service like a small company, even if they’re a big corporation.

Manufacturers often don’t deal with or even think about end users. But as your customers get more pressure from their customers, whose idea of brand behavior is based on Amazon, they will be passing that pressure on to manufacturers.

That is likely to translate into factories that can do more in one place, possibly with a smaller footprint and a smaller staff. Instead of a gigantic central facility with hundreds of workers, there will be smaller, more versatile facilities in more places.

Rexroth will be there.

The advantages of local for local are significant:

  • Increased speed and agility allow a faster response to market forces.
  • A shorter, greener supply chain improves sustainability and cuts costs.
  • Closer work with customers’ R&D divisions allow partnerships that benefit both sides.

Many corporations underestimated the expenses involved in transportation, extra inventory needed to cope with logistics delays, communication, and oversight when they decided to offshore, Cooke says. The cost of labor isn’t the only cost involved in manufacturing, and industry 4.0 continues to make labor a smaller part of the equation.

Rexroth continues to be a leader in motion control, not only in technology but also in deeper understanding of the major trends in consumer behavior and business models.

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