The Challenges of Earning the Made in the USA Label

Michael Clark
Tue, Sep 22, 2015
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American manufacturing is on the rise and so is consumer interest in domestic goods.

U.S. manufacturing is on the rise. Since 2010, the country has made efforts to reshore industries and bring major assembly plants back home. GlobeSt.com, a real estate resource, reported many companies want to use domestic options for future production.

As American manufacturing grows steadily, there are more opportunities for businesses to capitalize on consumer demand for domestically made goods. In a global economy, however, a Made in U.S.A. label may not be as straightforward as it once was.

Evolving manufacturing processes need automated data collection solutions to account for every step of procedures. Tracing materials back to their origins allows companies to prove their products are American made.

The Growth of Domestic Manufacturing
The Boston Globe shared U.S. Department of Finance findings that stated U.S. manufacturing increased by 45 percent between the years of 2009 and 2014. Recent technological developments and government policies have made domestic production more affordable. Companies have incentives to move operations from overseas factories to local options. From 2010 to 2015, 300 companies have returned to U.S soil.

The advanced technology used in manufacturing has also created a bit of a problem. The BBC interviewed students at the University of Tennessee and found a few young people feel like they do not have the skills to go into modern manufacturing jobs. Assembly workers have to work side-by-side with robotic equipment. In today's production lines, employees must be well-versed in engineering, mathematics and computer science. Modern mobile data collection tools simplify processes and assist workers.

Recent news indicates manufacturing growth should continue for a few years, but there is worry it won't last. Manufacturers need to promote their domestic values to ensure the audience stays invested in U.S. products.

The Demand for US Made Goods
American customers want local businesses to succeed. The Boston Globe reported on numbers from Consumer Reports indicating more than 70 percent of U.S. consumers prefer domestically made goods to foreign imports, and 60 percent said they would pay more for the U.S. manufactured option.

Retailers have noticed this trend and want to offer more local goods. The Toledo Blade said retail giant Wal-Mart is taking more bids from domestic suppliers. Recent manufacturing practices create American products that are more cost competitive. In the current marketplace, retailers can buy U.S.-made merchandise for less capital than before but gain the same amount of positive public relations. Affordable prices for domestic goods allow consumers to support their country and stretch their finances.

Many retailers and manufacturers wish to display their products with Made in the U.S.A. proudly stamped on their packaging. Modern production is a little tricky, though, and tracing a product's origin may take multiple steps.

Earning the Label
An item's parts could be completely produced in a foreign factory and then assembled in America. Every step of manufacturing could take place in one country but all of the raw materials could be from another. In a global economy, it's difficult to determine which location is mostly responsible for the creation of a product.

The Federal Trade Commission has guidelines for determining if companies can label products as made in America. To receive the label the item must be all or virtually all produced in the U.S. It's the virtually all part that's up for debate. Basically it means the vast majority of manufacturing occurred in U.S. territory. This is why an appliance can have the label when 87 percent of its parts were domestically manufactured.

If only part of manufacturing took place in the U.S., a company can look into getting a qualified label. Business can mark items with all of the countries that participated in its production. For example, merchandise may claim to be "made in the U.S. and imported parts."

Manufacturers must report every step of their production to the proper authorities to qualify. The price of raw materials, location of each process, distribution history and nationality of suppliers all play a part in the labeling decision. Companies that use automated data collection devices in their production lines create a real-time account of procedures, which companies can share with official regulators. Intricate record keeping details the exact origin of a product and allows packaging to display the information proudly. 

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