From Sea to Shining Sea

Many of us will be hearing (or singing) “America the Beautiful” as we celebrate the birth of our nation. When you do, think for a minute about this familiar refrain: “America! America! God shed his grace on thee. And crown thy good with brotherhood, from sea to shining sea!” In today’s manufacturing industry, we are brothers. As brothers do, sometimes we compete with each other. But also, we share a common cause. The collective progress we’re seeing in bringing manufacturing back to our shores, and everywhere in between, is both an inspiration and a call for further action.

Great News So Far

Recently The Association for Manufacturing Technology released an excellent video, the AMT Industry Report on Reshoring. There’s a lot of great news in here, for example:

• 10 years ago, offshoring was increasing at the rate of about 150,000 jobs per year, and reshoring wasn’t happening – we were losing 150,000 jobs per year
• Today, reshoring and offshoring are both happening at a rate of about 40,000 jobs per year
• In 10 years, we’ve taken a net annual loss of 150,000 jobs down to 0

Of course there are many factors contributing to this turnaround, such as automation, increased competitiveness of U.S. manufacturers, changes in Chinese wages and oil prices. But overall, reshoring progress is very good.

What Else Can We Do?

As an industry, there are things we can do to keep reshoring momentum going. For example, perhaps you’re involved in a competitive bidding process where overseas suppliers are also being considered. In the video, Harry Moser of the Reshoring Initiative encourages focusing on better metrics when considering what should be produced in the U.S. and what should be sent offshore. Many purchasers look only at direct costs and pricing (the typical bidding process). But Moser points out that this ignores 20-30% of all the costs they should be considering. A better metric would be Total Cost of Ownership, and there’s a free TCO Estimator available at ReshoreNow.org. By taking all costs into account, purchasers of manufactured goods could discover it makes good business sense to return to the U.S. for as much as 25% of what they’re currently offshoring.

To all manufacturers, from sea to shining sea, we wish you a happy Fourth of July holiday. We join you in a sense of pride for our collective progress, and we look forward to continuing to support your companies’ growth.