When the economy is volatile due to escalating international trade tensions, many businesses face unprecedented manufacturing challenges. The latest tariff news has created significant disruptions across global supply chains, with new tariffs affecting products from China, Mexico, and Canada. Companies that typically rely on overseas production should consider pivoting their strategy by embracing onshoring manufacturing.
At StudioRed, we’ve guided numerous clients through similar disruptions over our 40+ years in industrial design and product development. We’ve brought hundreds of products to market and have witnessed firsthand how onshoring can transform vulnerability into a competitive advantage when approached with the right expertise.
With unique insights from our founder, Philip Bourgeois, this post explores the benefits of onshoring manufacturing, practical strategies for implementation, and how innovative design can offset traditional cost barriers to domestic production.
Understanding the Shift Toward Onshoring Manufacturing
For decades, offshore production — particularly in China — offered significant cost advantages that overshadowed potential risks. However, the implementation of China tariffs has dramatically altered this calculation. With import duties increasing on hundreds of billions of dollars’ worth of Chinese goods, many products now face total landed costs that eliminate the original savings of offshore production.
“We must redo our math. This newly added cost will drive some of the natural reasons to manufacture in [China and other highly tariffed locations] into a reversed course, requiring us to find new locations to manufacture.”
— Philip Bourgeois, President and Founder of StudioRed
Similar challenges exist with Mexico tariffs, complicating what was once considered a reliable near-shoring option. Meanwhile, the new tariffs have introduced unexpected friction between the U.S. and Canada, with Canadian tariffs creating reciprocal trade barriers. The ripple effects of steel tariffs have been particularly pronounced, affecting everything from appliances to automotive components.
These tariffs significantly impact the process cost of goods beyond the duty percentage itself, making it important to consider the compounding effect.
For example, a 15% tariff on a $100 component accrues additional markups through your supply chain. By the time it reaches retail, that 15% tariff might represent a 30% to 40% increase in final consumer price.
While exploring alternative international locations like India remains a viable strategy, onshoring manufacturing is increasingly emerging as the more predictable, controllable option for businesses seeking long-term stability in today’s uncertain trade environment.
Designing for Efficient Domestic Production
A common misconception about domestic manufacturing is that it’s prohibitively expensive compared to overseas options. However, this perspective often doesn’t account for the impact of Design for Manufacturing (DFM) principles.
“In the 43 years of working in product development and with our engineering focus on DFM, we’ve always focused on reducing assembly time, aiding in ease of manufacturing, and integrating in-process test points to assure quality while reducing the cost of finding errors down the line.”
— Philip Bourgeois
A design for assembly (DFA) approach minimizes the number of components and simplifies the assembly process, reducing labor time and costs within U.S. manufacturing facilities. While lower labor costs in regions like China previously made intricate assembly cost-effective, a shift to U.S. manufacturing involves a strategic focus on simplifying product design to reduce assembly time and overall labor expenses.
There are benefits beyond tariff avoidance as well, including:
- Reduced inventory management complexity
- Lower quality control costs
- Enhanced product reliability through simplified design
- Shorter lead times and greater production flexibility
- Reduced shipping costs and carbon footprint
Optimizing Product Architecture for U.S. Manufacturing
It’s important to optimize product architecture through a comprehensive analysis framework that evaluates designs specifically for the U.S. manufacturing ecosystem. This considers multiple factors, like material selection and assembly sequencing, allowing you to identify opportunities where domestic production can offer unique advantages.
“Our main advantage in this direction is the reduction of human labor and designing to assist with automation. We do DFM during development so the product design is optimized for manufacturing. This may mean leaving in a small area for a robot grip or having clean square edges so the conveyor tray works easily, and it’s often free and invisible in the end.”
— Philip Bourgeois
This proactive approach to manufacturing challenges allows for streamlined implementation without sacrificing design quality or timeline constraints. By integrating DFM into the early stages of the development process, including the prototype manufacturing phase, adjustments can be made with minimal disruption to the design or project timeline.
Optimizing Product Design for Automated Manufacturing Facilities
Automation represents a powerful equalizer when comparing domestic to offshore manufacturing costs. By designing new products specifically for automated assembly within U.S. facilities, companies can dramatically reduce the labor component that has traditionally driven production overseas.
Robotics has excelled in recent years, to the point where companies should look to remove as much of the labor costs as possible through automation. Some strategies to optimize for automation include:
- Designing standardized component orientations for robotic pick-and-place operations
- Creating snap-fit assemblies that eliminate fasteners
- Optimizing tolerances for automated quality verification
- Developing modular architectures that allow for parallel assembly processes
The upfront investment in automation-friendly design often yields returns within the first production run, particularly when factoring in tariff exemptions for domestic production and reduced quality issues.
Key Factors for Successful Onshoring in the Tariff Era
When considering onshoring manufacturing, several factors determine success. The following are some essential considerations for a smooth and effective transition to domestic production:
- Conduct a comprehensive cost-benefit analysis: A thorough analysis must account for the elimination of tariffs, potential fluctuations in shipping and logistics, the enhanced resilience of a shorter supply chain, and the opportunities for cost optimization through design and automation in domestic facilities.
- Be strategic with partner selection: Look for companies with the specific expertise, capacity, and quality standards required for your products. A strong partnership can streamline the onshoring process and contribute to long-term success.
- Establish a robust domestic supply chain: A reliable network of domestic suppliers for raw materials, components, and other necessary inputs is crucial for a stable and efficient production process. Strong relationships with local vendors can mitigate risks associated with international shipping and potential trade disruptions.
- Understand the regulatory and legal landscape: Navigating federal, state, and local regulations is essential for compliance and operational efficiency. This includes understanding labor laws, environmental regulations, safety standards, and any relevant industry-specific requirements.
Work With a Strategic Partner for Onshoring Manufacturing
The most successful onshoring initiatives we’ve supported at StudioRed share a common theme: They don’t simply recreate overseas manufacturing processes on domestic soil — they reimagine production through innovation.
By embracing automation, advanced materials, and novel manufacturing techniques, companies can establish domestic operations that compete globally even in a tariff-influenced market.
“After decades of product development, we’ve designed with almost every material, every piece of equipment, and assembly method possible. This allows us to cross-pollinate from one manufacturer or manufacturing process to another.”
— Philip Bourgeois
This cross-pollination of best practices represents StudioRed’s distinct strength. For instance, applying assembly techniques from the medical device industry to consumer electronics can yield dramatic efficiency improvements that make domestic production not just viable but advantageous, even before considering new tariffs and trade barriers.
To enable the manufacturing of our clients’ unique product ideas, we leverage our decades of experience in successful problem-solving.
Navigating tariff-driven disruptions often requires a strategic shift toward onshoring manufacturing, offering greater control and resilience through innovative design. With over 40 years of industrial design and engineering experience, StudioRed offers a unique understanding of DFM and a collaborative approach with U.S. manufacturers. We help businesses navigate tariff complexities and build a competitive advantage through intelligently designed, domestically produced products. Get in touch today to learn more about how we can help you with your next project.
