Making Reshoring DecisionsPosted: April 29, 2013
To reshore, or not to reshore? That’s the question examined during two workshops and lively discussions today. Harry C. Moser, founder and president of the Reshoring Initiative, explains that reshoring is bringing manufacturing back to the United States. But, he emphasizes that this is not solely for the benefit of the U.S., because at its core is the concept of bringing manufacturing to the market where products will be consumed.
Moser’s reshoring workshop was followed by a look at the “Changing Landscape of Manufacturing in the U.S.,” by Daniel Feiman, managing director of Build it Backwards.
Both manufacturing experts agreed the landscaping is slowly changing and will continue to change in the future.
Manufacturing left the U.S., Moser contends, because companies did not do their math properly. He said they “applied rudimentary total-cost models and ignored 20 percent or more of the total cost of offshored production when they shipped manufacturing overseas.” With rising labor costs in China, he expects labor costs in China and the U.S. to converge around 2015.
Feiman says manufacturing has been moving back to U.S. shores for numerous reasons, including quality control, reduced shipping costs and consumers desire to see a “Made in America” label.
Moser and Feiman highlighted companies that have reshored recently, from Airbus to GE, as well as several middle-market companies. Moser said he is passionate about bringing manufacturing back to the U.S. He told the crowded workshop that the Reshoring Initiative offers many free online tools to help companies calculate if reshoring is the best move for their companies.
Feiman noted that reshoring has been going on since 2008, and he projects it will continue in earnest for the next several years.
“The question is, do you want to participate, or sit around and watch as your competitors participate?” he said.