home > pmps > summer 2013 > coming home
Pharmaceutical Manufacturing and Packing Sourcer

Coming Home

Over the last decade, many industries have increasingly looked to emerging markets as a base for cost-effective operations – and the pharmaceutical sector is no exception. Indeed, the ‘offshoring’ trend has spread through the sector, with pharma contractors and clinical research organisations often outsourcing to non-traditional countries, attracted by the available patient pool, healthcare systems and favourable regulations. Manufacturing and production companies have also been enticed overseas, especially to China, where lower labour, operational and infrastructure costs have proved a popular ticket.

However, a US initiative that aims to stop the high number of North American manufacturers moving their operations to other countries is now gaining momentum. Originally launched in 2004, the Save Your Factory campaign, organised by FANUC Robotics, seeks to educate manufacturers serving all industries about the benefits of returning to home shores.

According to the initiative, the appeal of emerging markets has run its course for manufacturers. Those working overseas now face additional burdens, such as an extremely long supply chain, long inventory delays, high shipping costs and the growing problem of intellectual property theft – concerns which are bringing many companies back to the US.

As well as highlighting these hidden costs, the campaign emphasises the advantages offered by robotics and automation solutions, which it says can help manufacturers stay viable and globally competitive by remaining based in the US. Most of the followers and supporters of Save Your Factory are equipment suppliers, system integrators, government representatives and associations.

Overseas Costs

The initiative argues against companies manufacturing in low-wage markets for the following reasons:

  • High costs associated with importing products, such as high taxes, inventory delays, inability to maintain and monitor inventories, and intellectual property concerns
  • Exposure to the effects of volatility in exchange rates with other major currencies (1)
  • Fuel and transportation costs are at an all-time high
  • More difficult to implement and maintain quality control policies and procedures, leading to an increased risk of poor product quality and potentially affecting large inventories in transit
  • The inability to respond to surges in demand by implementing shorter product pipelines
  • The low-cost real estate across the US

Local Manufacturing

As the campaign explains, companies must consider the implications on their bottom line, and manufacturing locally instead of overseas can cut these costs significantly.

In addition to high fuel and transport costs, it is becoming difficult to monitor quality in products shipped from overseas. High transportation costs come into play again if damaged or badly manufactured products must be shipped back to an overseas manufacturer. There will also be lost transit time.

Another consideration is that, as consumer demand changes, companies based overseas may face greater costs in implementing changes due, for example, to slower reaction times and language barriers.

Furthermore, corporations lose money and their customers grow impatient when they have to wait for products to arrive from overseas. Long delays and great distances also make it difficult to track and correct problems when they arise. The instance of intellectual property theft, a relatively new concern among manufacturers, can be discovered, stopped or prevented more efficiently on domestic soil, says the initiative.

An added incentive for US companies based in China to return home is the new laws in place for overseas employers and foreign nationals to contribute to Chinese national healthcare. Recently introduced legislation indicates that “companies could pay roughly 37 per cent of monthly income per employee, and employees in turn could pay 11 per cent, representing potentially hundreds of dollars per month per worker” for healthcare if you are a foreign national employer or employee working in China (2).

The Boston Consulting Group reports that “products that require less labour and are churned out in modest volumes, such as household appliances and construction equipment, are most likely to shift to US production” – and pharmaceutical manufacturers could well follow suit (3).

Robotics Solutions

The initiative also argues for the increased use of robotics and automated solutions within domestic manufacturing, as they can compete – and often win – against overseas manufacturing, when total manufacturing and distribution costs are carefully evaluated. In particular, high-speed, highly repetitive cost-effective robots are now available for picking, packing and assembly applications that were previously done manually and cheaper in emerging markets.

Marketing and international business specialist Andrew Thomas states in an IndustryWeek forum that “in a globalised economy, using robots might be one of the best ways for US manufacturing jobs to live, thrive and survive”, because robots allow companies to remain competitive and grow while cutting costs (4). By implementing robotics solutions, workers can be moved to better, more skilled locations.

Other initiatives have been launched to support the drive to encourage businesses back to the US. These include the Bring Jobs Back to America Act introduced in 2012, which proposes creating repatriation task forces to identify opportunities for moving manufacturing back to US soil and potentially providing tax breaks for returning firms (5).


1. Dollar charges to 3-year highs vs major currencies, Reuters. Visit:

2. Tberezowsky, China imposes health care tax – Is this enough to reshore US manufacturing operations? 1st June 2011. Visit: http://agmetalminer. com/2011/06/01/china-imposeshealth- care-tax-is-this-enough-toreshore- us-manufacturing-operations

3. Made in the USA, again: manufacturing is expected to return to America as China’s rising labor costs erase most savings from offshoring, 5th May 2011. Visit: www.

4. Thomas AR, Robots save and create mfg jobs. Visit: http://forums. php?t=22011

5. Tice C, Moving factories back home, 19th April 2011. Visit:http:// insideedge/articles/movingfactories-ct.aspx

Save Your Factory urges US manufacturing companies to recognise automation, robotics and efficiency measures such as lean manufacturing as more cost-effective and profitable alternatives to offshoring. It implores corporations to examine all the factors associated with manufacturing success – not just the initial short-term investments. The initiative was set up in 2004 by FANUC Robotics. More information is available at

Read full article from PDF >>

Rate this article You must be a member of the site to make a vote.  
Average rating:

There are no comments in regards to this article.


Print this page
Send to a friend
Privacy statement
News and Press Releases

Exploristics present the Welcome Organisation with Christmas Shoeboxes

More info >>

White Papers

Points to Consider When Developing a TMF (Trial Master File) Strategy

Phlexglobal Ltd

Many organizations are currently outsourcing clinical trial activities to one or more contract research organizations (CROs). This strategy enables companies to leverage specialized expertise and take advantage of flexible resourcing throughout the conduct of a clinical trial. Outsourcing minimizes the costs of recruiting experts, building a team and maintaining an infrastructure. However, it can also add complexity as the organization looks to meets its compliance obligations regarding clinical trial documentation. The documentation referred to in Article 15(5) of Directive 2001/20/EC as the trial master file shall consist of essential documents, which enable both the conduct of a clinical trial and the quality of the data produced to be evaluated.1 This essential study specific documentation is also known as the TMF. As organizations try to minimize their reliance on paper files, the electronic TMF (eTMF) has emerged. A current industry initiative to standardize the organization of this content is known as the TMF Reference Model. This model is helping standardization efforts across paper and electronic systems. As companies implement outsourcing strategies, CROs and sponsor organizations look for a common foundation on which to build their TMF capabilities. The following paper outlines some of the challenges organizations face when outsourcing clinical trial activities to multiple contract research organizations and a strategy to facilitate partnering and management of trial information between sponsors and CROs.
More info >>

Industry Events

7th annual Orphan Drugs and Rare Diseases UK

18-19 October 2017, Holiday Inn Kensington Forum, London

SMi Group is thrilled to present the 7th annual Orphan Drugs and Rare Diseases conference, taking place on 18th & 19th October 2017 in Central London, UK. This year’s theme will be focused towards discussing strategies for patient engagement, market access and gene therapies to enhance rare diseases and orphan drug research.
More info >>



©2000-2011 Samedan Ltd.
Add to favourites

Print this page

Send to a friend
Privacy statement