As a way to encourage businesses to bring back production to the U.S., the Commerce Deparment developed an online tool that helps firms assess the total costs of locating manufacturing operations overseas.
The tool, called Assess Costs Everywhere (ACE), allows businesses to more accurately assess labor costs, shipping costs, product quality, intellectual property, and regulatory compliance, among other factors, and enable companies to make better informed decisions about where to locate their production facilities.
As an example, one of the main reasons that companies have cited for moving manufacturing operations overseas is low labor costs. Although raw hourly labor rates are significantly lower in some other countries, this does not take into account other factors that can can affect total labor costs. The ACE tool provides information on other factors that can significantly impact labor costs in other countries, including exchange rates, productivity, high turnover, and others. In many cases, once these factors are taken into consideration, the perceived advantage of lower labor costs is notably if not completely diminished.
The ACE tool can be accessed by going to http://acetool.commerce.gov/.