Economic Development
Program
The Reshoring Initiative provides tools and information directly
to manufacturers to help them make better sourcing and siting decisions. In addition the Reshoring Initiative offers programs
to help economic development organizations, Manufacturing
Extension Partnerships, universities, community colleges and other
organizations work with their local manufacturers to bring back offshored work
and develop a skilled workforce, thus strengthening the local community.
Our focused
reshoring program is high impact with minimal cost. It gives groups specific actions
they can implement in their communities that will help identify opportunities
for work that can be reshored, educate importing companies about the benefits
of reshoring, and close any cost gaps that may prevent work from being reshored.
Currently, this program is being used in Pennsylvania, Mississippi and central
New York State.
Contact
us to learn
more about developing this opportunity in your area.
Focused
Reshoring Program:
1. Use the Datamyne
database to identify all ocean freight imports by all regional companies,
generally OEMs.
2. Decide which imports are, in
aggregate, in large volume and could be economically produced in the region: either
in-house or by suppliers (generally SMEs). For example:
•
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.
•
Emphasize: products for which the region has the required
suppliers or skilled labor, even if not in excess.
3. Use your team and other interested
parties to contact the importers. For
example, include local suppliers of capital equipment, industrial supplies,
components, etc. These groups have teams in the field, know the manufacturers
and will benefit strongly from reshoring
4. 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 (often 30%)
offshore. They might also mention taxes, regulations, etc.
5. Educate the involved importers
with the Reshoring Initiative’s free Total Cost of Ownership (TCO) Estimator to reevaluate offshoring vs. reshoring.
For example:
•
The Initiative trains the Economic Development Organization’s
field staff to discuss reshoring with the importer and trains a few staff to be
the local experts. The local experts call on the Initiative for help if
needed.
•
The Initiative presents at Reshoring Summits to engage the
importers and suppliers and visits key importers to accelerate the process.
6. Help the importers see that
there is often no or only a small TCO difference with local production or
sourcing.
7. If the importer has lost the
knowledge required to produce the products, assemble a team to help them
redevelop that knowledge. (See 8 below.)
8. For work that the importer
decides to outsource domestically, introduce the importer to local suppliers or
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, instead of purchase price, is consistently used to make
sourcing and siting decisions.
9. Identify any remaining TCO
gaps vs. offshore. To close remaining small gaps, utilize a team, as needed:
•
Automation: e.g. machine tool and automation distributors and
producers
•
Workforce technology skills training: technology providers and
distributors, trade associations, community colleges
•
Lean and other process improvements: MEPs, AME (Association for Manufacturing Excellence),
universities, etc.
•
Economic Development assistance: EDOs.
10. Recruit new facilities by
other U.S. companies or FDI (Foreign Direct Investment) to fill large regional
supply gaps.
11. Using the TCO software,
forecast when additional work would be reshorable based on forecast increases
in foreign labor costs. Follow-up accordingly.
12. Develop tools to help the
importers decide to reshore:
•
Lists of regional or state companies that have successfully
reshored.
•
Lists of suppliers, including those to whom importers have reshored
sourcing.
•
TCO/Reshoring Initiative.
•
Lists of resources to help reduce Total Cost at importer or
supplier.
•
Free publicity, if wanted.
Benefits:
·
Strengthens your state and the country as work comes
back from offshore rather than from neighboring states.
·
Minimal incentives, since the work comes back
in the self-interest of the involved companies.
·
Strengthens local ecosystems around OEMs to
make them more successful and more firmly linked to the region.
·
Helps you focus on reshoring, the
substitution of local production for imports. U.S. production is about 30% more
competitive here than offshore.
·
Feeds the skilled workforce program by making
local reshoring visible to the community, affirming that manufacturing is a
strong long-term career choice
Contact us
today to make your region the model for the rest of the country.
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