#285. Caterpillar Shifts from Offshoring to Onshoring Back to the U.S.A.

Posted on | The Agurban

We have been hearing about “Onshoring” for quite some time. Onshoring is the practice of bringing production work back to the United States to reduce global supply chaing management costs, the opposite of “offshoring”. Logistics Today recently posted a story about manufacturing giant, Caterpillar, which is undertaking an analysis of where the global excavator market is heading and how the company should position itself for continued leadership in the excavator industry. Excerpts from the article are below (www.logisticstoday.com):

Caterpillar Shifts from Offshoring to Onshoring Back to the U.S.A.

As part of a long-term strategic initiative, construction equipment manufacturer Caterpillar Inc. has undertaken a study that could lead to a new hydraulic excavator facility being built in the United States, as part of the growing trend toward onshoring-bringing production work back to the United States to reduce global supply chain management costs. Such a move could triple the current capacity of hydraulic excavators now produced by the company in the U.S. and significantly increase Caterpillar’s employment in the U.S. dedicated to excavator production, and further leverage excavator production in Japan to serve increasing demand in China and across Asia.

This study is part of a long-term strategic initiative to develop the appropriate global footprint needed to competitively produce hydraulic excavators. Hydraulic excavators are a core machine family made by the company and are widely used in applications around the world. If finalized and approved, the new U.S.-based factory would be the primary North American source for excavators.

We at Agracel will continue to watch this fasinating trend, as the manufacturing sector is a favorite of ours. We will have more on the manufacturing rebound in a couple of weeks.