February 21, 2020

February 2020 eNewsletter - Reshoring - A Key to Improved Sales, Cost, Inventory and Skilled Workforce

February 2020 E-News: Reshoring - A Key to Improved Sales, Cost, Inventory and Skilled Workforce
 Welcome to the Reshoring Initiative’s bi-monthly newsletter. The Reshoring Initiative is a non-profit organization with the mission to increase your profitability and bring 5 million manufacturing jobs back to the U.S. Here is a summary of all of the ways to benefit, followed by an update on U.S. competitiveness.

­­­ What are your objectives for 2020?

1. Find new customers, increase sales? Stop losing to imports: Use the TCO Estimator and ISP. We helped one U.S.-based company win a $60 million order over a Chinese company this way.

2. Reduce cost? Use TCO Estimator to reevaluate what you import.

3. Reduce inventory? Find local sources or produce in the U.S. Finished goods inventory will drop about 50%. One case reduced 96%.

4. Be ready for a recession? With less finished goods inventory in the factory and in the pipeline, your balance sheet will recover faster during a downturn.

5. Strengthen your skilled workforce? Employees and recruits will be more loyal to companies that are loyal to their communities and country.

6. Strengthen U.S. manufacturing? If all companies take these actions, U.S. manufacturing will grow about 8% and add 1 million jobs.

Resources to Achieve Your Objectives

Total Cost of Ownership Estimator®
For companies importing components, products or tooling: Reevaluate what you have been importing based on price. About 20% will be more profitably made or sourced here.

For companies competing with imports: Use to convince your customers to import less and source more from you.

Reshoring Library and Searchable Database
For companies importing components, products or tooling: Research what your competitors have successfully reshored. (3500+ cases of reshoring and FDI).

For companies competing with imports: Find companies that have reshored. Sell to them.

Import Substitution Program (ISP)
Identify importers of what you make. Use TCO to convince them to buy from you instead.

Supply Chain Gaps Program
For companies importing components, products or tooling: Identify products that are heavily imported but not produced here. Fill the gap.

National Reshoring Awards
For companies importing components, products or tooling: Apply to win.
In the News: Progress in U.S. Competitiveness
According to recent news reports, we are doing better on manufacturing and reshoring and will continue to do so. We already see the following results and structural changes that should help accelerate the trend in 2020.

January 2020 PMI rose to 50.9 - Any reading above 50 indicates manufacturing is strengthening.

U.S. Trade Deficit Declines in 2019 In 2019 the U.S.’ overall trade gap fell 2% and the gap with China fell 18%.

Because of the Tariff on Mold Tooling, This Indiana Mold Shop’s Business is Now Booming Precise Tooling Solutions says its orders in the first three weeks of 2020 exceeded all of 2019, attributing all of the increase to the tariffs reinstated at the end of 2019. The shop is not alone in supporting tariffs, which were reinstated after 150 other companies filed comments with the Trump administration. The 25% tariffs bring the price disparity under 20% - a gap buyers are accepting.

US Manufacturing Executives are Supportive of Increased Tariffs Despite the Risks of Recession A recently released LevaData study found more manufacturing executives (32%) actively support the Trump tariffs than don’t (22%). The rest were neutral (46%). Further, 65% think the tariffs will ultimately lead to improved global trade practices.

Has your company reshored or implemented FDI in response to the Trump tariffs? Let us know about it and we will share your story. The non-partisan Reshoring Initiative recognizes the negative impacts of the tariffs and hopes that the longer-term gain will be worth the current pain. Email harry.moser@reshorenow.org.

 Phase One China Agreement Passed As part of the deal, China has committed to purchasing $77 billion of manufactured goods over two years. This improvement will only bring back about 10% of the 2.8 million jobs lost to China as reported by the Economic Policy Institute, but it is a good start.
U.S. Unveils Crackdown on Counterfeit, Pirated E-commerce Goods, providing a "long overdue call to action in the U.S. government’s fight against a massive form of illicit trade that is inflicting significant harm on American consumers and businesses."

Manufacturers Willing to Spend to Shut the Skills Gap 80% of manufacturers are ramping up their workforce training efforts, with the sector spending $26.2 billion on training programs for new and existing employees.

2020 Rate Outlook: Fortune Favors the Bold Webinar reported that fuel surcharges are expected to increase 35% and freight increase 2 to 3%. Additionally, it reported infrastructure congestion in Southeast Asia, e.g. Vietnam, due to work coming over from China. These factors further incentivize U.S. sourcing.

Upcoming Events

February 23 – Standards Publishing Advisory Board (SPAB) 2020, Cape Coral, FL

March 24-25 – American Manufacturing Summit, Chicago, IL
Harry Moser will be speaking at this event, which brings together 200+ top manufacturing executives from numerous industries and organizations. Limited VIP attendance registrations are available to Reshoring E-News subscribers at a 60% discount. To take advantage of this opportunity, please connect directly with the AMS Head of Delegates, Jeff Horton: jhorton@generisgp.com - 416-840-8924 (password: network19). See you in Chicago this March!

April 1-5 – AMT’s MFG 2020, Ft. Lauderdale, FL

June 10-11 – Amerimold 2020 Sourcing Fair, Novi, MI
This event is for companies wanting to shift to domestic suppliers of plastic, glass and rubber molds and molding. Sourcing Fair 2019 was a great success. Attending companies were pleased with the suppliers they found to replace their offshoring.

Oct 1-5 – Made in America 2020, Detroit, MI

Ongoing Reshoring Awards, click for application details:

Newer Newsletter Older Newsletter