SEPTEMBER 23, 2013

The old textile mills in the Carolinas are mostly gone now. Gaffney Manufacturing, National Textiles, Cherokee — clangorous, dusty, productive engines of the Carolinas fabric trade — fell one by one to the forces of globalization. Just as the Carolinas benefited when manufacturing migrated first from England to New England and then to here, where labor was even cheaper, they suffered in the 1990s when the textile industry mostly left the US. It headed to China, India, Mexico — wherever people would spool, spin and sew for a few dollars or less a day.

But remarkably, Parkdale Mills, the country’s largest buyer of raw cotton, has reopened and is thriving–another indication of the resurgence of US manufacturing, reports The New York Times (Sept. 20, 2013) in its cover story. For example, just last year, clothing maker American Giant was buying fabric from a factory in India. Now, it is cheaper to shop in the US, using Parkdale yarn.

American manufacturing has several advantages over outsourcing. Transportation costs are a fraction of what they are overseas. Turnaround time is quicker. Most striking, labor costs aren’t that much higher than overseas because the factories that survived the outsourcing wave have turned to automation and are employing far fewer workers. Further, monitoring worker safety in places like Bangladesh, has become a huge challenge.

In 2012, textile exports were $22.7 billion, up 37% from just 3 years earlier. That the industry is thriving again is indicative of a broader reassessment by companies about manufacturing in the US. A recent M.I.T. survey found that 1/3 of American companies with manufacturing overseas said they were considering backsourcing some production, while 15% said they had already decided to do so. This means jobs–but on nowhere near the scale there was before, because machines have replaced humans at almost every point in the production process. Take Parkdale: The mill produces 2.5 million pounds of yarn a week with about 140 workers. In 1980, that production level would have required more than 2,000 people.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.