Springfield Is the Ideal Location for Companies Looking to Diversify their Manufacturing & Supply Chains
July 17, 2020
The importance of manufacturing products in the United States is becoming clearer than ever as international travel and trade has been restricted by COVID-19. These risks are even more apparent as China has grown to become the largest exporter of intermediate goods in the world. Even if companies are assembling products within the U.S. or Europe, many of the supplies they need to do so come from China. When China virtually shut down to address COVID-19, this led to a cut off of crucial supplies and companies ranging from Apple to Ohio toy manufacturers scrambling to find new suppliers or to accept massive delays in production.
Diversify Into Springfield to Prevent Supply Chain Disruptions
A survey of Fortune 1000 companies found that 94 percent have suffered supply chain disruptions due to COVID-19. This has led to lower production output, costly delays and in some cases - empty shelves. It is critical for companies to begin evaluating how they can reduce this risk to their supply chain in the future.
Opening manufacturing facilities in Springfield, Ohio could help. With a plant in the United States, companies will be less vulnerable to a crisis happening in China. Remember that COVID-19 is not the first virus to ravage the country and cause shutdowns. SARS is another recent example and only serves to highlight the risk to companies who are placing all of their eggs in the China basket. Even if a U.S. plant only handled a small percentage of a company’s production, it could be easily ramped up to accomodate an increased need caused by delays overseas.
Another solution is to increase inventory levels and to invest in additional U.S. warehousing space. Springfield, Ohio is conveniently located within a day’s drive of the majority of the United States, with fantastic interstate and rail access. From a logistics standpoint, Springfield cannot be beat, and since real estate prices are affordable, companies are finding it advantageous to invest here.
A U.S. Manufacturing Site Creates Business Opportunities
In addition to preventing critical supply chain disruptions, opening a manufacturing facility in Springfield can create new business opportunities. “As hoped, our plans to expand to Springfield have resulted in increased production requests from our customers – Honda, Toyota and Nissan. In addition, the Springfield community continues to support our growth and has proven to be an ideal location for our company. It’s simply a community that wants our investment and works with our leadership to make it happen,” said Brad Pepper, SVP of Topre America.
These opportunities are likely to grow in the wake of COVID-19 as companies like L.O.L Surprise! manufacturer, MGA Entertainment, look for more U.S. suppliers. They are one of many companies that will be actively diversifying in the next year.
Springfield Has What You Need for a U.S. Manufacturing or Warehousing Site
Springfield has the property, location, and workforce companies need to successfully open a U.S. manufacturing and/or warehousing facility. To learn more about our sites or our community, contact Horton Hobbs IV, Vice President of Economic Development for Expand Greater Springfield by emailing hhobbs@greaterspringfield.com.
References
Bhattarai, J. W. (2020, February 25). U.S. companies face crucial test over China’s factory shutdown. Retrieved from Washington Post: https://www.washingtonpost.com/business/2020/02/25/us-companies-so-far-are-surviving-chinas-factory-shutdown-next-few-weeks-are-crucial/
Frazee, G. (2020, February 24). How novel coronavirus could change the map on global manufacturing . Retrieved from PBS News Hour: https://www.pbs.org/newshour/economy/making-sense/novel-coronavirus-could-be-a-wake-up-call-for-companies-relying-on-china
Garcia-Herrero, A. (2020, February 28). Companies must move supply chains further from China. Retrieved from Bruegel: https://www.bruegel.org/2020/02/companies-must-move-supply-chains-further-from-china/
