Tuesday, February 12, 2013

The Preference for “Made in America”

With discussions of outsourcing and supply chain logistics, I began to reflect on Americans and their affinity for products “Made in the U.S.A.” Due to personal preference, overt national pride, or support of jobs for Americans, it seems that many people appreciate the stamp stating that the product they bought was made in America. It seems that this trend had started becoming more prevalent in the past ten years, but has recently escalated in importance. I wondered how significant people’s preferences for “Made in America” really were, and if it was enough to dictate manufacturing locations and change supply chain logistics.

Evidence supports that U.S. manufacturing is becoming more preferred, and therefore more competitive. In addition to rising labor costs in China and other countries, consumers seem to be emphatic about purchasing goods manufactured in the United States [1]. And it is not only Americans that will pay more money for products made in their own countries, as many European nations prefer products made in their own countries, but interestingly enough, 61 percent of Chinese consumers would pay a premium for products manufactured in America as opposed to goods made in China [1]. Part of this makes sense – it seems natural that Americans prefer products made in the United States and are willing to pay more for a higher quality product that is made in America [2]. What becomes more intriguing is the fact that almost half of Chinese consumers, too, prefer American-made products to equivalent Chinese-made products, and are willing to pay almost 80 percent more for certain types of products if they are manufactured in the United States [2]. If this trend continues, manufacturing may in fact be moving back to America, having serious implications on supply chain logistics and product consumption.

It seems that the tables are turning due to a multitude of factors, but consumer attitudes and quality preferences cannot go unnoticed: American manufacturing has certain advantages, one of which is the simple stamp stating “Made in America.”

Question to consider:
1. Boston Consulting Group conducted a study in August 2011 on manufacturing in America highlighting economic trends leading to the new surge in American manufacturing [3]. What other factors – aside from labor costs and consumer attitudes – can be attributed to the “Made in America” sensation?

[1] Kim, Kathleen. “Study: Consumers Prefer ‘Made in USA’.” Inc. November 18, 2012. http://www.inc.com/kathleen-kim/consumers-prefer-products-labeled-made-in-the-usa.html.

[2] McCue, TJ. “Made in America Has a New Ring.” Forbes. November 19, 2012. http://www.forbes.com/sites/tjmccue/2012/11/19/made-in-america-has-a-new-ring/.

[3] Sirkin, Harold L., Michael Zinser, and Douglas Hohner. “Made in America, Again.” Boston Consulting Group. August 25, 2011. https://www.bcgperspectives.com/content/articles/manufacturing_supply_chain_management_made_in_america_again/

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