Tag: made in USA

OM in the News: Reshoring is Up, But Problems Persist

Manufacturing companies increased their interest in reshoring operations this year, writes Material Handling & Logistics (Sept. 3, 2026). The 2026 USA Reshoring Survey Report found that 36% of manufacturers had reshored or were actively engaged in additional reshoring– an increase from 29% in 2025.  Projects are still in the works as well, with 32% of manufacturers saying they were currently quoting reshoring projects–double the 16% reported in 2025.

Why Reshore? The top reason might not be a surprise — tariffs. Here is a breakdown of survey results.

  • Tariffs — 65%
  • Geopolitical Risk — 60%
  • Delivery time/proximity to customers — 50%
  • Image/Brand of Made-in-USA — 40%
  • Quality/Rework/Warranty — 25%
  • Having manufacturing near engineering –15%
  • Tax Reduction (from One Big Beautiful Bill) — 10%

Benefits of reshoring. Respondents saw these benefits as a result of their reshoring efforts.

  • Improved speed to market — 70%
  • Better fulfillment/on-time delivery — 65%
  • Logistics savings (freight/transit) — 60%
  • Inventory optimization/lower carrying costs — 40%
  • Enhanced pricing power/brand value –20%

Challenges to Reshoring

However, there are challenges to reshoring, and those have changed over time.  Currently, the top challenge, at 35%, is the availability of labor and overhead costs. Other issues include:

  • Domestic component gaps — 35%
  • Supply chain transition friction –20%
  • Labor availability challenges — 15%
  • Regulatory /compliance burdens –15%

While the Reshoring report is optimistic about reshoring as a way to reduce imports, a recent survey, The Kearney 2026 Reshoring Index, found a less positive view. They said that despite changes in US trade and tariff policies and significant changes in geopolitical realities, as of the end of 2025, America remains even more reliant on imports while its manufacturing capacity remains years away from projected goals.

The report found that despite US manufacturing investments tripling over the past four years, there’s only been 1.5% growth in capacity so far. Resolving the labor issues and other barriers to reshoring, at the end of the day, requires further supply chain adjustment.

Classroom discussion questions:

  1. Why might companies be motivated to reshore even when the outcomes are less positive than expected? What does this tension reveal about strategic decision‑making in operations management?
  2. How do capacity limitations, labor shortages, and domestic component gaps shape the feasibility of large‑scale reshoring? What operational strategies could help firms overcome these constraints?

OM in the News: The U.S. Made T-Shirt

The U.S. is awash in a sea of cheap imports that has destroyed much of the domestic apparel industry. In 2023, less than 4% of the apparel purchased in America was made here, reports The Wall Street Journal (Dec. 31, 2024).  Then, there is Walmart, whose aisles are piled high with goods this holiday season. But one item sticks out: cotton T-shirts that were made in America and cost $12.98.

The Walmart T-Shirt

It wasn’t tariffs that made the $12.98 shirt economically feasible, says the CEO of American Giant, the U.S. apparel company producing them. It was Walmart’s heft—and guaranteed orders. The country’s biggest retailer—and importer of consumer goods—pledged in 2013 to buy more items that were made, grown or assembled in the U.S. In 2021, Walmart increased its goal and promised to spend billions more each year through 2030.

American Giant said that without Walmart acting as a backstop by committing to buy a predetermined number of shirts over time, American Giant’s suppliers wouldn’t have had the confidence to make the investments in automation and other upgrades that drove down production costs. The company buys yarn that is grown, spun, dyed and sewn in the U.S., contracting with suppliers mainly in the Southeast. It also owns cutting and sewing facilities in N. Carolina and Los Angeles.

How did American Giant get the price down from the $40-$60 it usually charges for a T-Shirt? By automating parts of the process to keep labor costs low, it was able to compete with countries such as Vietnam and China where workers are paid a fraction of the U.S. minimum wage.

“You can make almost anything here, as long as it doesn’t require lots of labor,” says the CEO. To fulfill Walmart’s order for hundreds of thousands of shirts, the company tweaked the design and then spent $1 million on machinery designed to make production faster and more efficient.

The T-shirts arrived in 1,700 Walmart stores and were up against other 100% cotton T-shirts selling for half as much. But those shirts didn’t have any American emblems. Walmart bars suppliers from using the term “American Made” or the American flag on products that aren’t made in the U.S. Despite the success of American Giant and a handful of other apparel companies that have figured out how to produce domestically, it is unclear how much Americans care about buying products made in the U.S.

Classroom discussion questions:

  1. Could American Giant have reshored without Walmart?
  2. What are the key OM decisions that were made?