Reshoring King Has Some Company in US Manufacturing Trend

by Taras Berezowsky on November 15, 2013

Style:    Category: Manufacturing, Sourcing Strategies

Harry Moser, president of the Reshoring Initiative, sat down with us after speaking at Commodity/PROcurement EDGE to chat about his passion that gets him out of bed every morning: reshoring manufacturing jobs to the United States.

Man, for a guy that does, by his own count, hundreds of speaking engagements a year in the name of reshoring, Harry Moser must continue to stoke quite a fire in his belly.

As he told MetalMiner (in our video interview, above) recently, he’ll continue to push the benefits of reshoring until he, well, expires. But it seems as though his hard work is surely paying off. You can’t turn around in the mainstream press or blogosphere without running into mentions of Moser, it seems – but due to his work, the trend continues.

What It Means for Buyers

In our sister publication, Spend Matters, guest contributor Joel Johnson of GEP gives the readers in our particular sphere a bit more context:

“There are multiple implications and challenges for procurement if the trend of re-shoring continues to gain momentum, but a lack of a strong domestic supply base is the biggest. Having personally worked with firms to bring back specific production lines to the US, I saw that the redevelopment of local and regional supplier networks was the most integral in ensuring the success of manufacturing operations from a procurement standpoint. Enabling such a transition may include more progressive procurement tactics such as direct supplier investment, vertical integration, and the development of knowledge-sharing frameworks.”

In Plain English

An example of how reshoring could be worth it for even smaller US manufacturers: according to Matt Hodges writing in the China Daily (which quotes Moser), “in April, the president of Quality Float Works Inc, a Chicago company that makes hollow float metal balls, told ABC Radio Australia that his experiment with outsourcing to China had proven to be a mistake due to faulty materials, delivery delays and the changing economic landscape.

“It started out being a very positive experience. We were able to save a lot of money, but unfortunately it went downhill,”Jason Speer is quoted as saying. “It became a nightmare. It ended up costing us money overall, because all the time and money that we wasted in trying to check everything … (we) ended up just having to buy it again.”

More Sourcing Tools to Consider Reshoring

Moser’s TCO (total cost of ownership) Estimator has some company. According to the comment thread from this electronics-industry-supply-chain-blog post (which also quotes Moser), consulting firm Charlie Barnhart & Associates also has a TCO tool (true cost of outsourcing, in their case), which “comprehends three distinct factors, all with multiple sub-factors that are embedded, which are: 1. Global Pricing for services purchased [ed. note: no surprise there], 2. OEM Internal Spend: what OEMs spend internally to acquire and manage outsourced solution, [and] 3. Geographic [sic] risk associated with solution chosen,” according to commenter Eric Miscoll.

Also, to Joel Johnson’s points above, Chase Richardson of fabricating.com will present “Sourcing in America: How Will Buyers Find You” at the huge FABTECH 2013 conference here in Chicago next week. The site’s “SourceNow technology enables buyers to build their U.S. supplier network to manufacture made-to-order, made-in-the-USA parts,” according to this release.

But what’s the real takeaway here? Harry Moser is everywhere.

Where do you stand on the reshoring issue? Leave a comment below! 

And with rising energy costs (a key TCO  input) affecting bottom lines for manufacturing organizations everywhere, how will low-cost natural gas impact your business? Take this quick snap poll!

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