Tuesday, July 15, 2014

Reshoring IT Hardware Leads to TCO Cost Savings and Risk Avoidance

A recent post on Planet Magpie, an IT blog, asks the seemingly-simple but surprisingly-complicated question, “where did your computers come from?” And perhaps more importantly, why should you care?

As Planet Magpie puts it:
Buying IT hardware made offshore contributes to America’s economic stagnation, causes higher levels of pollution, supports unfair labor practices, and can pose risks to your network security. Depending on which manufacturer makes your computers – and where it’s done – you could end up with:
... 
The reason knowing the location matters is because, depending on where a computer is manufactured, the hardware can expose you to several serious risks. Using American-made hardware almost completely avoids these risks, and you can support local industries at the same time.
Beyond the risks of offshoring as discussed in depth on Planet Magpie, customers and manufacturers in the IT hardware and computer industries are finding that the benefits of reshoring cover a broad spectrum of TCO costs:
  • Quality
  • Data security risk*
  • Green considerations
  • Inventory
  • Freight cost
  • Lead Time
  • Social/ethical concerns
  • Skilled workforce availability/training
Much of our computer and associated hardware was manufactured outside the U.S. But this is changing: as big-name computing companies like Apple and Lenovo, and hardware producers of everything from chips (Intel) to servers (HP) to network infrastructure (Leviton Network Solutions), move manufacturing to or back to the United States, we see a growing realization among manufacturers not just of the risk avoidance the Planet Magpie post discusses, but of the real cost savings and macroeconomic benefits of domestic manufacturing.

What Planet Magpie looks at as risks, we prefer to see as costs: costs that can be significantly reduced or avoided altogether by reshoring IT hardware production to the U.S.

* Not included in TCO calculation.

Monday, June 23, 2014

Reshoring Initiative June 2014 Newsletter

In the News

Surveys reveal data on reshoring trend
The Entrada Group conducted a single blind study and found “Re-shoring getting more attention by the day.” Some of the conclusions they found:
  • 62% of respondents rank the United States and Mexico ahead of China now as top “low-cost” manufacturing locations
  • Offshore cost savings are not always realized — companies that expanded to a “low-cost manufacturing location” achieved their goals to a large extent only half of the time, with half of them realizing just moderate savings or worse.
The MIT Forum for Supply Chain Innovation announced recently that it has launched its 2014 global manufacturing survey. To participate, click here. The survey will follow up on the 2012 survey and report with Supply Chain Digest, "U.S Re-shoring: A Turning Point."

Manufacturing worker hours reflect a stable economy
Pointing to the higher average work week in manufacturing that hit 42 hours in November and March (a level not seen since July 1945), Nobel laureate and Yale University economist Robert Shiller deduces that the odds of a recession are very low (businessinsider.com), exemplifying yet another correlation of how a healthy economy depends on a robust industrial sector.

National Manufacturing Day, and further characteristics of the trend
The National Institute of Standards and Technology (NIST) reports that manufacturing supports more than 17.4 million U.S. jobs. Thanks in part to reshoring, that number is growing. In acknowledgement of National Manufacturing Day, NIST published a table of informative statistics: What Manufacturing Really Looks Like: Celebrating Manufacturing Day. Check it out and decide how you will participate in the next Manufacturing Day scheduled for October 3, 2014.

Reshoring is included in Industry Week’s report: These 5 Manufacturing Trends Are No Joke:
  1. Increased reliance on automation and robots
  2. Reshoring
  3. Rapid prototyping
  4. Smaller orders
  5. Leaner factories. 

 

Skilled Workforce Update

With manufacturing returning in force and with modernized operations, companies continue to find it challenging to acquire the right workers. The Reshoring Initiative believes the skills gap is the greatest barrier to successful ongoing reshoring. Happily, we are starting to see great efforts being made to improve the situation. Here are just a few informative discussions on the subject:

On May 8 in Windsor, CT, Harry spoke to high school students about careers.
MazakCorp Northeast reported a "Great day for the student summit," and Clement Fucci, Manufacturing Technology Instructor for 31 years at Westfield Vo-Tech High School, tweeted: @harrymoser was awesome!!

 

Recent Event Highlights

Massachusetts is one of the many states poised to benefit from reshoring. Harry was the keynote speaker at the Massachusetts Advanced Manufacturing Summit, presenting immediately after Governor Deval Patrick.

The 2014 Manufacturing Leadership Award for Industry Advocacy was presented to the Reshoring Initiative on June 5th.

 

Data Update

With the constant outpouring of reporting on reshoring, our database is growing. We continue to manage and analyze it to track the trend. Here are some of our latest numbers.
Note: We extend a special thanks to graduate students at the University of Wisconsin, Madison QRM Center for identifying additional articles for the Library.

Have a story to tell? Submit your reshoring success story at reshorenow.org/resources, and we will also highlight it here.

 

2014 Upcoming Events

 Other Reshoring Events:
A complete list of upcoming Reshoring Initiative appearances can be found on the Upcoming Events page.

If you have a reshoring event and would like to include the Initiative, or be listed in our Newsletter, send us an email!

     

    Reshoring Resources

     

    Reshoring Initiative Sponsors:

    Congratulations to our sponsors, you are doing a great job of bringing manufacturing back to the United States!

    PLATINUM

    http://www.gardnerweb.com/http://www.amtonline.org/
    http://www.dgsmarketingengineers.com/http://www.sme.org/

     

     

    GOLD

    http://www.morrisgroupinc.com/http://www.gfac.com/content/gfac/country_US/en.html/

    Silver

    AME
    NTMA
    MAZAK
    PMA
    UNITED GRINDING
    The Wessel Group
       

    Bronze

    AFS
    Doosan
    FESTO
    Milltronics CNC Machines
    Royal Products
    SPI
    TCI Precision Metals
    U.S. Bank

    Steel

    Big Kaiser
    ERA
    IPC
    Manex
    NAHAD
    Parlec
    Swiss Machine Tool Society

    Iron

    California Metals Coalition
    CTMA
    EROWA
    MSSC
    Nutec
    Starrag
    USCTI

     

    Mr. Moser,

    It was refreshing to hear the can do approach to bringing the economic engine of "making things" back to the US.

    Thank you again,
    Mitch
    Mitch Kennedy, ND, CEM, LEED-AP
    Design with Nature, LLC

     

    All reshoring successes depend on actions. Please consider posting a link to the Reshoring Initiative on your website, and/or donating your time, talent or dollars. You can download our logo at the website. Contact us for more information on how you can help or how the Initiative can help you.

    As always, thanks for your support.

    Harry MoserReshoring Initiative (847) 726-2975

    Millar Kelley – Newsletter Editor and Research Analyst

    Join our mailing list.

    Friday, May 2, 2014

    Another angle on TCO - Do you know what your Priceberg is?

    Check out this great article by Kate Vitasek: Don’t Re-shore a Priceberg
    Apr 11, 2014






    Excerpts: 

    "Best Value takes procurement professionals out of the price-only focus so that they understand the total cost of the deal or enterprise in front of them. This is TCO. Best Value and TCO go hand-in-hand, and when understood and implemented properly, pricing becomes value-based and becomes a win-win."

    "Put simply, it's not about how much you pay, it's about how much you get. In a nutshell, that is the basic difference and tension between price and value. Best Value approaches become the bridge spanning that tension because determining the true cost and value equation translates into confidence that companies are getting the best deal."

    "The advantage of using the TCO model is that businesses can make clear, informed decisions when it comes to price and value decisions, and when and where to outsource.
    The researchers Jaconelli and Sheffield describe the intent of Best Value as enabling a balance between cost and quality considerations, while ensuring ongoing value for money and promoting continuous improvement to further value for money.”

    “Best Value = Optimum Benefit
(sum of criteria as defined by the buyer)
– Buyer's Total Costs

Documenting the entire picture by capturing the costs of the buyer and the supplier is the only way to get to the actual total costs. This includes all cross-departmental costs within the buyer's organization as well."

    "Identifying all the true total costs is not so straightforward, however, and it is often not easy. Drilling down to the "hidden" or below-the-surface costs is crucial because those hidden costs can comprise about 80 percent of total costs. The Priceberg shows the importance of looking at the hidden costs."



    Use the Reshoring Initiative's free Total Cost of Ownership Estimator

    Monday, April 28, 2014

    Reshoring Initiative April 2014 Newsletter

    In the News


    The second half of winter was a busy time for both reshoring and the Initiative.

    Mississippi and Pennsylvania are leading the reshoring charge!
    The Initiative is training teams in Mississippi and Pennsylvania to help companies reevaluate offshoring. To participate, companies in those states can contact:
    We anticipate a similar effort in Alabama and are talking to other states and cities. If you would like to accelerate reshoring in your state, please put us in touch with your economic development organization, MEP or other groups that want manufacturing to grow.

    The world is paying attention.
    Following the example of the U.S., international reshoring is growing, especially in Europe where companies are beginning to bring production back to serve local markets. European reshoring is driven by similar motivations (minus cheap energy) including: labor cost, lead time, quality, IP risk, inventory, R&D, mass customization/rapid change, exchange rates, local branding, skilled workforce, and communication. Look for a complete report from the Initiative soon.

    CareerBuilder survey finds: 1 in 4 Employers Reshoring Jobs in 2014
    "According to the 2014 U.S. Job Forecast, 26 percent of employers nationwide plan to "reshore" jobs this year – bringing offshore jobs back to U.S. – up from 23 percent in 2013... Indeed, if the reshoring trend continues, it could be a major boon for the labor market – and the economy as a whole."

    2014 Manufacturing Leadership Award Winner
    The Reshoring Initiative was selected as a 2014 Manufacturing Leadership Awards winner in the category of Industry Advocacy Leadership.

    Website resource update
    Our Library of published reshoring cases now contains over 1000 articles. Sortable data from these articles is available in the Advanced Search function on the website.

     

    Recent Event Highlights

    Over 2000 people joined the Deloitte webinar in which the Initiative presented Re-shoring: Is It Time for Mid-Market and Private Companies to Bring Manufacturing Home? The Initiative appreciated the insights and market access that Deloitte provided.

    On Thursday, March 13th at 1:00 pm, the U.S. House of Representative's Subcommittee on Economic Growth, Tax, and Capital Access held a hearing on reshoring. The Reshoring Initiative was contacted to testify but was not available to do so. Instead we sent a proposal based on our economic development and skilled workforce program. We had recently submitted the proposal to Commerce Secretary Pritzker via Cong. Wolf (VA).

    At the WHMA (Wire Harness Manufacturer's Association) Annual Conference in Orlando, Harry Moser, President of the Reshoring Initiative, and the Agave Wire team discuss the Reshoring Initiative and total cost of ownership (TCO). Stephen Fleming, (center) President of Agave, is now using TCO to sell against offshore competitors.

    Lou Lenzi, Director Industrial Design, GE Appliance Park, Louisville, KY (left), and Harry Moser of the Reshoring Initiative discuss GE's success reshoring appliance production to Appliance Park.

    Harry Moser is accompanied by guest speakers, the Presidents of the Fédération des chambres de commerce du Québec and Laurentides Économiques; hosts of the event, and the U.S. General Consul in Montreal. March 20, 2014 – Conference in the Laurentian region Reshoring and exportations in the United States (from left to right): Stéphane Lalande, President, Laurentides Économique; Harry Moser, President, Reshoring Initiative; Françoise Bertrand, CEO, Fédération des Chambres de Commerce du Québec (FCCQ); Yan Cimon, Associate Professor of Strategy, Faculty of Business Administration, Universite Laval; Louis Duhamel, Strategic Advisor, Growth Enterprise, Deloitte Canada; Andrew C. Parker, U.S. General Consul in Montreal.

    Upcoming 2014 Events


    Other upcoming events that include reshoring:
    A complete list of upcoming Reshoring Initiative appearances can be found on the Upcoming Events page.

    If you have a reshoring event and would like to include the Initiative, or be listed in our Newsletter, send us an email!

     

    Reshoring Resources

     

    Reshoring Initiative Sponsors:

    Congratulations to our sponsors, you are doing a great job of bringing manufacturing back to the United States!


    PLATINUM

    http://www.gardnerweb.com/http://www.amtonline.org/

    http://www.dgsmarketingengineers.com/http://www.sme.org/


     

     

    GOLD

    http://www.morrisgroupinc.com/http://www.gfac.com/content/gfac/country_US/en.html/


    Silver

    AME
    NTMA
    MAZAK
    PMA
    UNITED GRINDING
    The Wessel Group
       

    Bronze

    AFS
    Doosan
    FESTO
    Milltronics CNC Machines
    Royal Products
    TCI Precision Metals
    U.S. Bank

    Steel

    Big Kaiser
    DRMA
    ERA
    Manex
    NAHAD
    Parlec
    Swiss Machine Tool Society
    VMA

    Iron

    California Metals Coalition
    Chicago White Metal Casting
    CTMA
    EROWA
    Industrial Fasteners Institute
    MSSC
    Nutec
    Starrag
    USCTI

    Thursday, April 17, 2014

    Reshoring Initiative's Sandy Montalbano to present at DFMA

    Sandy Montalbano will be speaking on behalf of the Reshoring Initiative at the DFMA 2014 International Forum. The innovation advantages of having manufacturing near engineering is a major driving force in reshoring.  We are delighted to have this opportunity to update the DFMA community on reshoring and TCO. See event details below. 

    Simplifying Product Design and Manufacturing with DFMA—Boothroyd Dewhurst to Host 2014 International Forum on DFMA
    June 4-5 in Providence, R.I., USA
    WAKEFIELD, R.I., USA, XXX, 2014—Boothroyd Dewhurst, Inc. will host the twenty-ninth annual International Forum on Design for Manufacture and Assembly (DFMA®) on June 4-5, 2014 at the Crowne Plaza Hotel, Providence-Warwick, R.I., USA. Presenters at this year’s forum will discuss how DFMA promotes Lean and Value Engineering through simplification, leading to improvements in design, manufacturing and business profits.

    “Starting in early design, simplification helps engineers establish a product structure that is immediately more multifunctional and cost efficient. Those elegant designs carry far-reaching benefits, allowing managers to conceive and construct streamlined supply chains—from process development and assembly, to inventory monitoring and demand fulfillment,” said John Gilligan, president of Boothroyd Dewhurst, Inc.

    “This year we wanted to demonstrate not only how DFMA, Lean and Value Engineering are legs of the same optimization effort, but how our software and methodologies help development teams initiate world-class approaches to the end-to-end business of making and supplying great products,” says Gilligan.

    “The user data is clear,” says Nick Dewhurst, executive vice president of Boothroyd Dewhurst, Inc.  “When manufacturers undertake DFMA product simplification and cost estimating up-front, they are better able to realize cost avoidance downstream in post-manufacturing functions. These big picture savings are what allow manufacturers to pursue effective “Build Where You Sell” strategies and reshore production back to large, domestic markets.”

    Forum speakers will include the Reshoring Initiative, Dynisco, and other industry leaders and universities. This year’s keynote address will be delivered by author Richard Schonberger and will examine the critical relationship between DFMA and Lean practices. James Bolton of Whirlpool Corp. and president of SAVE International® will conduct an independent, pre-conference lecture and hands-on workshop on June 3 that will introduce participants to how functions, function analysis, and FAST diagrams relate to DFMA.

    About the DFMA Forum
    The Forum is the foremost conference worldwide on DFMA methodologies and software. DFMA helps structure a team’s knowledge and guide collaboration efforts from the concept stage onward to create feature-rich products at less cost. It does this by providing comparative “should cost” estimates for manufacturing processes and materials, and by targeting opportunities for product simplification.

    The Forum offers insights and solutions to managers, financial decision-makers, design engineers, manufacturing engineers, purchasing personnel, and supply-chain experts interested in benefitting from up-front product development.

    For more information on the 2014 International Forum on Design for Manufacture and Assembly, and the pre-conference workshop, go to http://www.dfma.com/forum/index.html.

    About Boothroyd Dewhurst, Inc.
    Boothroyd Dewhurst, Inc. was the first company to commercialize Design for Manufacture and Assembly (DFMA®) methodologies and software tools, which make it possible to evaluate, estimate, and reduce the manufacturing cost of a product in the design phase through product simplification and cost estimation. Hundreds of Fortune 1000 companies, including General Electric, John Deere, Motorola, Pratt & Whitney, and Whirlpool, use DFMA to cut the costs of their manufactured products and achieve design innovation in their markets. The company was founded in 1983 and received the National Medal of Technology Award in 1991. For more information about DFMA software, workshops, consulting services, and international conferences, contact Boothroyd Dewhurst, Inc., 138 Main Street, Wakefield, RI 02879, USA. Tel. (401) 783-5840. Fax (401) 783-6872. Web site: www.dfma.com. E-mail: info@dfma.com.
    DFMA is a registered trademark of Boothroyd Dewhurst, Inc.

    Editorial contact:
    Miles Parker, Parker Group
    401-272-1510
    Simplifying Product Design and Manufacturing with DFMA—Boothroyd Dewhurst to Host 2014 International Forum on DFMA
    June 4-5 in Providence, R.I., USA
    WAKEFIELD, R.I., USA, XXX, 2014—Boothroyd Dewhurst, Inc. will host the twenty-ninth annual International Forum on Design for Manufacture and Assembly (DFMA®) on June 4-5, 2014 at the Crowne Plaza Hotel, Providence-Warwick, R.I., USA. Presenters at this year’s forum will discuss how DFMA promotes Lean and Value Engineering through simplification, leading to improvements in design, manufacturing and business profits.

    “Starting in early design, simplification helps engineers establish a product structure that is immediately more multifunctional and cost efficient. Those elegant designs carry far-reaching benefits, allowing managers to conceive and construct streamlined supply chains—from process development and assembly, to inventory monitoring and demand fulfillment,” said John Gilligan, president of Boothroyd Dewhurst, Inc.

    “This year we wanted to demonstrate not only how DFMA, Lean and Value Engineering are legs of the same optimization effort, but how our software and methodologies help development teams initiate world-class approaches to the end-to-end business of making and supplying great products,” says Gilligan.

    “The user data is clear,” says Nick Dewhurst, executive vice president of Boothroyd Dewhurst, Inc.  “When manufacturers undertake DFMA product simplification and cost estimating up-front, they are better able to realize cost avoidance downstream in post-manufacturing functions. These big picture savings are what allow manufacturers to pursue effective “Build Where You Sell” strategies and reshore production back to large, domestic markets.”

    Forum speakers will include the Reshoring Initiative, Dynisco, and other industry leaders and universities. This year’s keynote address will be delivered by author Richard Schonberger and will examine the critical relationship between DFMA and Lean practices. James Bolton of Whirlpool Corp. and president of SAVE International® will conduct an independent, pre-conference lecture and hands-on workshop on June 3 that will introduce participants to how functions, function analysis, and FAST diagrams relate to DFMA.

    About the DFMA Forum
    The Forum is the foremost conference worldwide on DFMA methodologies and software. DFMA helps structure a team’s knowledge and guide collaboration efforts from the concept stage onward to create feature-rich products at less cost. It does this by providing comparative “should cost” estimates for manufacturing processes and materials, and by targeting opportunities for product simplification.

    The Forum offers insights and solutions to managers, financial decision-makers, design engineers, manufacturing engineers, purchasing personnel, and supply-chain experts interested in benefitting from up-front product development.

    For more information on the 2014 International Forum on Design for Manufacture and Assembly, and the pre-conference workshop, go to http://www.dfma.com/forum/index.html.

    About Boothroyd Dewhurst, Inc.
    Boothroyd Dewhurst, Inc. was the first company to commercialize Design for Manufacture and Assembly (DFMA®) methodologies and software tools, which make it possible to evaluate, estimate, and reduce the manufacturing cost of a product in the design phase through product simplification and cost estimation. Hundreds of Fortune 1000 companies, including General Electric, John Deere, Motorola, Pratt & Whitney, and Whirlpool, use DFMA to cut the costs of their manufactured products and achieve design innovation in their markets. The company was founded in 1983 and received the National Medal of Technology Award in 1991. For more information about DFMA software, workshops, consulting services, and international conferences, contact Boothroyd Dewhurst, Inc., 138 Main Street, Wakefield, RI 02879, USA. Tel. (401) 783-5840. Fax (401) 783-6872. Web site: www.dfma.com. E-mail: info@dfma.com.
    DFMA is a registered trademark of Boothroyd Dewhurst, Inc.

    Editorial contact:
    Miles Parker, Parker Group
    401-272-1510