Import Substitution Program For MEPs*

Purpose:

The Import Substitution Program (ISP) enables MEP professionals to accelerate reshoring and FDI (foreign direct investment). in their regions. Use ISP to help larger manufacturers decide to produce or source locally and SME manufacturers to compete against imports and generate work by replacing imports with local production. ISP will advance regional growth as it helps U.S. companies decide to reshore and foreign companies decide to do FDI. ISP is a unique tool that can make your region economically stronger and your center a nationally recognized innovator.

ISP will also: strengthen your contacts with larger companies; increase cooperation with EDOs; and provide engagements to increase competitiveness via lean, automation, training and supply chain optimization.

Executive Summary:

Today, the new tariffs are causing companies to shift work out of China. Lower corporate taxes and regulations, higher offshore wages, consumer demand for quick delivery and an increased emphasis on skills training make the U.S. an increasingly attractive destination for that work. U.S. and foreign companies are seeing the benefits of proximity, i.e. producing in the market, especially when the home market is the U.S., still the world's largest. ISP will help you identify and sell to the best prospects among these companies.

Most technology suppliers are fighting for share of the current U.S. market. ISP will expand your market by about 20%, identify prospects and provide the tools to make them into customers.

ISP will provide detailed data on relevant imports by regional or national companies and provide the sales tools to convince them to reevaluate their offshore sourcing decisions. The potential is huge. Our user data suggests that about 25% of the $2.2 trillion of imports would come back if TCO (Total Cost of Ownership), instead of wage rates or purchase price, is consistently used to make sourcing decisions. Substituting domestic production for 25% of imports will increase domestic manufacturing by 20%. ISP will help you get your share or more!

Program Objectives:

Accelerated local reshoring and FDI: Both in-house and outsourced locally by companies that are now importing. ISP will help you accelerate local reshoring and FDI by:

Providing detailed data on imports by regional companies.

Inviting companies to reevaluate offshore siting and sourcing decisions.

Creating opportunities for local companies to compete with imported products.

Identifying FDI opportunities based on regional and national supply chain gaps: Product categories that have large regional and national imports and no or minimal exports, suggesting a lack of domestic suppliers. These categories become targets for promoting local investment via FDI or horizontal manufacturing extension by related domestic companies or via venture capital.

Identifying the leading offshore suppliers of the gap product categories to create a target list for FDI.

Your Input:

Your input on some of these will help us to customize our deliverables for you.

A clear definition of your geographic region: state(s), counties or mile radius from a specific location.

Your choice of product categories from our list of regional highest volume import categories.

Who are the largest manufacturers in your region?

What are the largest categories of products manufactured in your region?

What product categories were formerly produced but significantly lost to offshore and the companies that offshored are still local?

What product or supplier categories are present locally and could expand to produce products now imported?

To get started, download and complete the ISP Input Data Form. (You can also view a filled out Example form.)

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Our Deliverables:

The Reshoring Initiative®’s Import Substitution Program will help you achieve the Program Objectives, above.

Level I: The Reshoring Initiative will provide data on annual imports into the region:

For target products: Ten HS codes and/or product descriptions

By target companies: Ten regional importers

From target offshore suppliers: Ten offshore suppliers. Good FDI prospects

By overall highest volume: Ten top import categories selected from a list that we will provide

Supply chain gaps: Up to five

Data will include for each product category:

Company names and addresses

Number of containers and weights of each product imported by each company

Approximate $ value

Also:

Standard written instructions for Implementation including use of our TCO (Total Cost of Ownership) Estimator for use with the companies.

Archived training webinar.

Phone and email support.

Level II: Additional help via phone and email

Level III: Field support

On-site help, training and presentations, e.g. using our TCO Estimator as a:

• Siting and sourcing decision tool by the importers

• Sales tool by local suppliers

Customized implementation plan

Joint articles on past and future local reshoring successes to promote your region’s competitiveness and the value provided by MEP.

Implementation Outline:

1. You provide Inputs, as above.

2. Reshoring Initiative provides Deliverables, as above.

3. Your team and other interested parties contact the importers.

4. Educate the importers to reevaluate offshoring vs. reshoring with the Reshoring Initiative’s free Total Cost of Ownership Estimator® (TCO). Use our program TCO - Getting a Company Started.

5. Help the importers see that there is often no or only a small TCO difference when they shift to local production or sourcing.

6. For work that the importer decides to outsource domestically, introduce the importer to local suppliers (supply chain optimization).

7. Identify any remaining TCO gaps vs. offshore. Apply automation, skills training, lean, assistance by local EDOs, etc.

8. Recruit new facilities by other U.S. companies or FDI (Foreign Direct Investment) to fill large regional or national supply chain gaps.

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Contact the Reshoring Initiative® for pricing.

Phone: +01 847 867 1144 | Email: harry.moser@reshorenow.org

*The ISP programs are available to help manufacturing companies, technology suppliers, trade associations, economic development organizations (EDOs), and Manufacturing Extension Partnerships (MEPs). This version is for Manufacturing Extension Partnerships. Similar versions for the other groups are posted here.