The
Reshoring Initiative recommends the high impact-minimal cost economic
development program outlined below and is seeking regions interested in
developing this opportunity.
Focused Reshoring Program:
Substitute
local production for products and components currently imported to the region
from offshore. A package is available from the Reshoring
Initiative and Datamyne to help EDOs (Economic Development Organizations)
bring back offshored work:
1. Description:
a. Use the Datamyne database to identify all ocean
freighted imports by all regional companies, generally OEMs.
b. Decide which imports are, in aggregate, in large
volume and could be economically produced in the region: in-house or suppliers
(generally SMEs). For example:
1) Exclude: produce that cannot be grown locally; items that
are intrinsically too labor-intense, e.g. hand painted Christmas tree
ornaments; minerals that cannot be found locally.
2) Emphasize those products for which the region has the
required suppliers or skilled labor, even if not in excess.
c. Ask the importers to consider producing or sourcing
locally what they now import. The
importers will say they do not produce or source locally because prices are
much lower (typically 30%) offshore.
They might also mention taxes, regulations, etc.
d. Educate the involved importers with the Reshoring
Initiative’s free Total Cost of Ownership (TCO) Estimator to reevaluate offshoring vs. reshoring. For example:
1) The Initiative
trains the EDO’s field staff to discuss with the importer and trains a few EDO
staff to be the local experts. The
local experts call on the Initiative for help if needed.
2) The Initiative presents at Reshoring Summits to engage
the importers and suppliers and visits key importers to accelerate the process.
e. Help the importers see that there is often no or only
a small TCO difference with local production or sourcing.
f. If the importer has lost the knowledge required to
produce the products, assemble a team to help them redevelop that
knowledge. See item 1h.
g. For work that the importer decides to outsource, bring
importers and suppliers together in a Purchasing Fair to start the shift of
work from offshore. Our user data
suggests that about 25% of offshored work would come back if TCO is
consistently used.
h. Identify any remaining TCO
gaps vs. offshore. To close remaining
small gaps, utilize a team, as needed:
1) Automation: e.g. machine tool and automation distributors
and producers
2) Workforce technology skills
training: technology providers and
distributors, trade associations, community
colleges
3) Lean and other process
improvements: MEP (Manufacturing
Extension Partnership), AME (Association for Manufacturing Excellence), etc.
4) Economic Development
assistance: EDOs.
i. Recruit new facilities by other U.S. companies or FDI
(Foreign Direct Investment) to fill large regional supply gaps.
j. Using the TCO software,
forecast when additional work will be reshorable
based
on forecast increases in foreign labor costs.
Follow-up accordingly.
k. Develop tools to help the
importers decide to reshore:
1) Lists of regional or state
companies that have successfully reshored.
2) Lists of suppliers to which importers
have shifted sourcing.
3) TCO/ Reshoring Initiative.
4) Lists of resources to help
reduce Total Cost at importer or supplier.
6) Free publicity, if wanted.
2. Benefits:
a. Work comes back from offshore rather than from neighboring
states. Much more win/win.
b. Minimal incentives, since the work comes back in the self-interest
of the involved companies!
c. Strengthens local ecosystems around OEMs to make them
more successful and more firmly linked to the region.
d. Feeds the skilled workforce program by making local
reshoring visible to the community.
In
all programs, we would be delighted to help make your region the model for the
rest of the country.
Harry C. Moser
Founder and President
Reshoring Initiative
Office +01 847 726 2975
web: http://www.reshorenow.org
It's wonderful. Thank you for sharing that.
ReplyDeletePlywood Manufacturers in India