For nearly three decades, American companies have been offshoring manufacturing services. Between ongoing trade tensions, increased regulatory restrictions, and the recent Suez Canal debacle, companies are struggling with the challenge of how to get offshore supply chain advantages closer to home.
The most simple solution for general contract manufacturing needs is to partner with a domestic manufacturer. Many companies, however, are reluctant to do so because they assume domestic sourcing can’t be as competitive and cost-effective as offshoring. We, at Pivot International, will show how our integrative sourcing solutions are disproving this assumption and demonstrating that domestic manufacturing can come with a wealth of benefits.
Tariff Avoidance or Reduction
The multi-year US-China trade wars have kept the question of tariffs high on companies’ radars and escalated the search for offshore alternatives. Depending on whether you partner with a domestic manufacturer instead of a China-based supplier for all or part of your product development needs, you can avoid tariffs entirely or significantly reduce them.
VAT
VAT is an acronym for Value Added Tax. Though almost all countries levy it, the U.S. does not. VAT is both similar to and different from sales tax. While sales tax is levied only upon the final purchase of a finished product, VAT is levied across the entire supply chain, making it a key cost that businesses must carefully factor. By partnering with a domestic supplier, you can make an end-run around all or part of VAT.
Lower Shipping and Container Costs
No matter where you source from, shipping and container expenses will always be part of the cost equation. But by sourcing domestically and avoiding sea-based transit routes, you can avoid some of the heftiest shipping expenses — ocean container costs.
Risk Reduction
The widespread disruption of 2020 showed companies that effective scenario planning could be incredibly costly, if not catastrophic. When you partner with a one-source domestic manufacturer like Pivot that brings a diversified sourcing network, you reduce multiple layers of risk. Because we own our facilities, we provide full transparency into our supply chain and operations, which means greater sourcing security and stricter quality control.
Because a one-source partner like Pivot knows the product development process from end to end — proof-of-concept through manufacture and distribution — risk is reduced by avoiding the all too common breakdowns that come with a piecemeal approach. With each layer of risk that is reduced, the less likely you are to experience unexpected and costly surprises.
Peace of Mind
Peace of mind is easy to take for granted until you no longer have it. While offshore manufacturing can be the ideal choice under certain circumstances, partnering with a proven domestic manufacturer means never dealing with language barriers or long-distance travel. Knowing you can easily communicate with your partner and be onsite within a few hours from anywhere in the U.S. can bring significant peace of mind.
Domestic Manufacturing Solutions
At Pivot, our international family of fourteen companies includes five in the American midwest specializing in cost-effective manufacturing solutions — Avatar, Castle Creations, DigitTron, EDM, and MCCE.
Avatar is one of our engineering firms specializing in IoT, SMT, box builds, and short to medium inventory runs of electronic product solutions.
Castle Creations is our motor control experts that offer medium to large-run manufacturing and product assembly. They have two fully automated SMT lines as well as automated optical inspection and potting.
DigitTron specializes in small to medium-run PCB manufacturing. They offer fully automated SMT and through-hole electronic assembly, full functional testing, and automated potting and conformal coating.
EDM is our full-service custom and contract manufacturing company, specializing in electronic assemblies with through-hole and surface mount circuit boards. They have mirrored state-of-the-art SMT lines with Pivot-Hawks, to ensure no interruptions in production – even in a natural disaster. EDM partners with customers on jobs with production runs ranging from initial prototype to full turnkey production. It offers an extensive engineering staff to serve its partners’ manufacturing, prototyping, circuit board layout, and electronic design and development needs. EDM is ISO 9001 and 13485 certified and includes an FDA Registered facility.
MCC Electronics is an industry leader in developing custom-designed electronic components, both original design manufacturing (ODM) and electronic manufacturing services (EMS). They specialize in industrial controls and box builds, and its onsite facilities support prototype, medium to high volume product assembly.
If you’re looking for a proven domestic manufacturing partner, Pivot can check all the right boxes to help you grow your business. With end-to-end product development expertise across fourteen industries, 320,000 square feet of manufacturing capability, and nearly fifty years of experience, we can help you move confidently forward and successfully bring a new product to market. Contact us today for a no-cost consultation. Together, we’ll help make your product vision a winning reality.
