Identifying Targets as Import Substitution Program (ISP) Suppliers
The listed characteristics are suggestions for finding ideal candidates. No candidate will meet all of them. Think of the list more as ways to identify best prospects rather than ways to exclude prospects.1. Characteristics of the company (your client):
a. # of employees: 25+, ideally 50+
b. Breadth of products produced: Narrow. Ideally a few product categories represent almost all sales, or one product category per 25+ employees
c. Competitiveness: Regionally or nationally highly competitive in their product categories, (But still offer opportunities to cut costs more.)
d. Level of automation: High
e. Capacity: Available
f. Creativity/flexibility: High
g. A mix of branded product and contract manufacturer companies.
h. Quick deliveries on products that would be surface freighted from offshore.
2. Characteristics of the products produced by the company (your client’s products):
a. High volume of imports, ideally not from customers’ own factories offshore
c. Not labor intense. At the company, Direct Labor ideally no more than 10 to 15% of mfg. cost.
d. Subject to Trump tariffs, esp. on Chinese imports.
e. Material: Standard such as bar or plate rather than castings or forging
f. Tooling: Standard/catalog or simple custom, rather than complex, expensive injection molds and dies.
g. Demand is seasonal or volatile.
h. Freight cost is high relative to labor cost.
i. Imported products primarily sold direct to B2B rather than thru distribution or warehouses.
j. Electricity or natural gas intense. E.g. die casting.
k. Delivery is often critical, requiring air freight for imports.
l. Local prospect customers.
m. High level of regulatory compliance.
n. IP risk.
o. U.S. substantially dependent on imports.
p. Critical or essential product for the country and/or the customer company.
q. Existing reshoring successes nationally in the product category.3. Characteristics of customer prospects (your client’s customers):
a. Solid financially
b. Civic minded
c. On the list of 181 CEOs that signed the Business Roundtable Statement that stakeholders now also include suppliers and community.- - -
Harry Moser/Founder & President