LeanShoring™ “Make it in America”
Revitalizing Domestic Supply Chains and Advanced Manufacturing Capabilities to Create Good Paying JobsReshored jobs were up nearly 45% in 2020. “A significant cause of the pick-up in reshoring is Covid-19,” said the Reshoring Initiative’s founder and president Harry Moser, noting that the pandemic was a motivating factor in 60% of cases since March 2020. A survey of 750 North American manufacturing firms found 69% were ‘likely’ or ‘extremely likely’ to reshore overseas operations.
Reshoring has already been a serious consideration for companies due to the ongoing U.S.-China trade war, rising costs and risks, and environmental initiatives; the pandemic has shined an even brighter spotlight on these issues. To help accelerate the reshoring initiative, President Biden has introduced an American manufacturing and innovation strategy to “MAKE IT IN AMERICA.” This initiative will help end the US dependence on China or any other country, by bringing back critical supply chains to America through the retooling and revitalizing of American Manufacturers. Biden’s plan predicts a gain of over 5 million US manufacturing jobs over the course of his term.
Biden’s plan will expand the role of Manufacturing Extension Partnerships (MEPs). The MEPs will identify firms — particularly small and medium size businesses— that have the capability to fill Buy American procurement needs, and provide direct support so that they can compete and make it here. The MEP organizations in each state will be joining forces with other public-private partners in supporting LeanShoring™ to learn how to competitively sustain and bring manufacturing jobs back home.
The practice of unconditionally offshoring manufacturing to save money shifted with the pandemic economy from sourcing decisions based primarily on cost to risk and resiliency to avoid supply chain disruption. Even prior to the pandemic, sourcing costs in China were rising. Companies are discovering that when they analyze the total cost of offshoring, it often makes more economic sense to keep supply chains local. The key to LeanShoring™ is doing a total cost analysis and then using lean practices – as opposed to using the same wasteful practices that allowed the work to be offshored in the first place.
Total Cost of Ownership (TCO) analysis reveals that reshoring can reduce costs while making supply chains more resilient. Harry Moser, founder and CEO of the Reshoring Initiative, has been educating manufacturers on the benefits of “local for local” production. To make informed business decisions, companies should consider using the Total Cost of Ownership Estimator® (TCOE) to objectively quantify, forecast and minimize total cost.
Reshoring focuses on quantifying the hidden costs and risks associated with offshoring, typically 15 to 25 percent of the ex works price. By adopting LeanShoring™ practices, organizations can reduce domestic manufacturing costs by eliminating waste in their current processes – including anything that does not provide value to the end customer – while driving an enterprise-wide continuous improvement process.
To help businesses become more competitive the Association for Manufacturing Excellence (AME) has a network of North American consortia, which are clusters of local companies that collaborate for broad, deep, accelerated lean and continuous improvement processes that are better, faster, cheaper and easier than what they can do alone. These dynamic practitioner-to-practitioner networks are designed to support small- and mid-size companies so they can sustain and refine their continuous improvement journey.
American manufacturers are turning to organizations like Made in America, whose goal is to inspire people to innovate, build, and buy American Made. By bringing hundreds of US manufacturers together into one place and giving them and the visibility of their products, Americans will see how many quality goods are still made here. They will also be the voice helping shape US manufacturing policy by connecting manufacturers with policymakers. Don Buckner, Sr. Chairman & CEO believes, “Our role is to stimulate patriotic spending, by educating the consumer about the importance of spending their American dollars on American made products to keep American jobs in America. A strong America equals a strong world economy.”
The Way Forward
As we see it, we need to initiate a new style North American “Marshall Plan” for the revitalization of a post-pandemic economy. To protect against future disruptions and shortages, we must rebuild home-based supply chains capable of producing critical items and sectors as we did for Europe after World War II.This new plan – a commitment to North American industry that is, frankly, overdue – must:
- Advocate for reshoring, nearshoring and LeanShoring™
- Increase our focus on industry 4.0 innovations
- Enhance educational and training offerings to create a stronger workforce
As a strategy, more companies are shortening their supply chain, which reduces cost, risk and delivery times. By working together with AME and other leading organizations, companies and their communities will be provided with a distinct competitive advantage; together they can boost their productivity and improve their sustainable resilience in this fast-changing competitive world.
Join with other leading organizations to learn how to lead your own manufacturing renaissance to eliminate supply chains disruptions, revitalize advanced manufacturing and build good paying careers in your community at the 2021 AME International Conference Oct. 18-21, 2021 in Atlanta, Ga. ---Together We Can Do It! Glenn Marshall, Newport News Shipbuilding Career Pathways (retired), is on the Association for Manufacturing Excellence (AME) Management Team initiative for leading a “Manufacturing Renaissance” and a member of the Reshoring Initiative and Job Creators Network. For more information contact firstname.lastname@example.org. ---