Monday, September 23, 2013

Walmart's U.S. Manufacturing Summit

I attended Walmart’s U.S. Mfg. Summit August 22 and 23 in Orlando. There were fifteen hundred attendees included senior managers from 500 Walmart suppliers. Presenters included Jeff Immelt, U.S. Secretary of Commerce Pritzker and 9 governors. I came away convinced that Walmart is doing everything it can to dramatically increase its purchases of U.S. manufactured products.  I met dozens of companies that are doing their best to provide a U.S. made product at a price and quality that U.S. consumers will find acceptable and choose vs. imported products.

To put Walmart’s goal into perspective: $5 billion of extra purchases per year will mean about 30,000 reshored manufacturing jobs. That will be a one-time doubling of the number of jobs reshored, currently about 30,000 per year. Ideally, other retailers will follow Walmart’s start and we will have many more.

The U.S. manufacturing cost does not have to reach the offshore cost for the Walmart price to be equal; The not-for-profit Reshoring Initiative’s free Total Cost of Ownership software helps corporations calculate the real impact of reshoring or offshoring. In many cases companies find that for the U.S. made alternative, although the production cost is higher, the overhead is enough lower to drive a lower total cost.

Reshoring Initiative Founder and President Harry Moser (right) meets VP, Merchandise Finance & Strategy - Softlines, Walmart U.S. Guy Rockey during Walmart’s U.S. Manufacturing Summit.

The Reshoring Initiative tracks all reported and some private cases of reshoring and concludes that about 80,000 manufacturing jobs have been reshored since Jan. 1, 2010.

Any company, including Walmart suppliers, trying to evaluate the feasibility of reshoring is encouraged to use our free software or call us for free advice. Readers can help bring back jobs and increase profitability by asking their companies to reevaluate offshoring decisions. Component suppliers can use the TCO software to convince their customers to reshore.

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