Tuesday, July 15, 2014

Reshoring IT Hardware Leads to TCO Cost Savings and Risk Avoidance

A recent post on Planet Magpie, an IT blog, asks the seemingly-simple but surprisingly-complicated question, “where did your computers come from?” And perhaps more importantly, why should you care?

As Planet Magpie puts it:
Buying IT hardware made offshore contributes to America’s economic stagnation, causes higher levels of pollution, supports unfair labor practices, and can pose risks to your network security. Depending on which manufacturer makes your computers – and where it’s done – you could end up with:
The reason knowing the location matters is because, depending on where a computer is manufactured, the hardware can expose you to several serious risks. Using American-made hardware almost completely avoids these risks, and you can support local industries at the same time.
Beyond the risks of offshoring as discussed in Planet Magpie, customers and manufacturers in the IT hardware and computer industries are finding that the benefits of reshoring cover a broad spectrum of TCO costs:
  • Quality
  • Data security risk*
  • Green considerations
  • Inventory
  • Freight cost
  • Lead Time
  • Social/ethical concerns
  • Skilled workforce availability/training
Much of our computer and associated hardware has been manufactured outside the U.S. But this is changing: as big-name computing companies like Apple and Lenovo, and hardware producers of everything from chips (Intel) to servers (HP) to network infrastructure (Leviton Network Solutions), move manufacturing back to the United States, we see a growing realization among manufacturers not just of the risk avoidance the Planet Magpie post discusses, but of the real cost savings and macroeconomic benefits of domestic manufacturing.

What Planet Magpie looks at as risks, we prefer to see as costs: costs that can be significantly reduced or avoided altogether by reshoring IT hardware production to the U.S.

* Not included in TCO calculation.


  1. When you compare the labor cost, does it still make sense? Thanks,

  2. We conclude that about 25% of what is now offshored would be more profitably supplied to the U.S. market by producing here instead of offshore, e.g. in China. That analysis includes labor cost.

  3. I am looking for some hardware components, especially computer components. I am planning to start a small business. Do you know where can I found some information and list of their products?