Reshoring Manufacturing: Returning Jobs to North America
Supply chain disruptions resulting from natural disasters, labor disputes, and now the Wuhan Coronavirus is impacting the movement of freight into and out of China which has started to affect North American manufacturing operations. As China struggles to contain the Wuhan-centered coronavirus outbreak, the resulting shutdown of factories and logistics hubs in the country is slowly constricting the global supply chain pipeline.
For decades companies have been shifting production offshore impacting manufacturing jobs and negatively affecting the world environment resulting in higher carbon emissions and pollution from developing countries and from long-distance transport. As a result, a trend known as reshoring, is gaining acceptance among manufacturers. Reshoring Harry Moser, founder of the Reshoring Initiative, is collaborating with the Association for Manufacturing Excellence (AME) to promote reshoring as part of its “Manufacturing Renaissance” initiative in North America. “We are committed to changing the sourcing paradigm from ‘offshored is cheaper’ to ‘local reduces the total cost of ownership,’” says Moser. “The likelihood of a costly production interruption increases greatly with distance; therefore, as a strategy more companies are adapting the shortening of the supply chain which reduces cost and risk,” says Kim Humphrey, AME President. “By working closely together AME and its alliance partners are reducing waste and supply chain disruptions to improve their ability to compete on the world stage. We encourage companies to follow Deming’s 4th Principle and source based on total cost instead of price.”North American Manufacturing
The new United States-Mexico-Canada Agreement (USMCA) is a mutually beneficial win for North American workers and businesses. When finalized and implemented, the agreement will create more balanced, reciprocal trade that supports high-paying jobs and grows the North American economy.
Although the new USMCA is a win for several key industries and workers, the Reshoring Initiative proposes an agreement that would have a larger impact with longer-term value. For example, a strategy that builds upon the massive U.S. and Canadian markets, Mexico’s proximity to those markets and low-labor costs, and the collective trade deficit in this reshoring and nearshoring era. Now it’s time for North American Business leaders to work together to eliminate the collective trade deficits with China to strengthen North American manufacturing and bring back millions of manufacturing jobs.
Moving Forward
Manufacturers are reevaluating their production and sourcing locations and are taking a closer look at the benefits of reshoring. Michael Porter, Bishop William Lawrence University Professor at the Harvard Business School explains, “The enduring competitive advantage in the global economy lies increasingly in local things – knowledge, relationships, and motivation – that distant rivals cannot match.”
Learn how business leaders and practitioners are coming together in leading a Manufacturing Renaissance for the 4.0 industrial and digital revolution. Learn how that Renaissance will help enable more reshoring. Come join with the Association of Manufacturing Excellence at the 36th annual AME International Conference — the world’s largest lean conference October 26-30, 2020 | Toronto, Ontario, Canada to sustain and create more jobs and opportunities in North America to win the global economic marathon.
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 Job Creators Network. For more information: marsh8279@aol.com.
