Reshoring has become a critical movement in American manufacturing, aiming to bring back jobs and production that were previously offshored to lower-cost countries. At the forefront of this effort is Harry Moser, a longtime advocate for reshoring and a trusted resource for NTMA members. With decades of experience leading a precision machining company, Harry founded the Reshoring Initiative® to help manufacturers assess the total cost of offshore production and make informed decisions about local sourcing.
Continue reading to explore why reshoring became such a pertinent topic for small- to medium-sized manufacturers and learn how you can promote this initiative yourself.
Why Reshoring Became Top of Mind for Manufacturers
Truth be told, a decade ago, reshoring wasn’t a major priority for many manufacturers, as global supply chains were running smoothly. However, the COVID-19 pandemic exposed vulnerabilities in overseas production, with delays, rising costs, and logistical challenges making offshoring less viable.
During this time, OEMs and machine shop organizations scrambled to find solutions, and Harry Moser – a go-to expert in reshoring who had been featured by prominent news organizations and even participated in former President Obama’s 2012 Insourcing Forum at the White House – practically became the emergency contact of many business owners. His years of research and advocacy proved crucial, and reshoring transitioned from something on the tip of everyone’s tongue to a top priority.
How to Align Your Business for Reshoring: Insights from the Reshoring Initiative
Harry Moser and the Reshoring Initiative provide several key resources to help manufacturers evaluate what goes into reshoring. Here are some ways machine shop management teams can improve reshoring opportunities:
1. Demonstrate total costs, not just part prices
One of the most common reasons OEMs source components from overseas is because they believe that U.S. production costs are too high. However, analyzing total costs, not just the prices of parts, often reveals that reshoring can be more cost-effective in the long run.
The Total Cost of Ownership Estimator® is a free tool that helps manufacturers compare offshore costs to domestic costs, incorporating factors like shipping, tariffs, and other hidden expenses.
2. Don’t wait for the business to come to you
The Import Substitution Program (ISP) helps manufacturers pinpoint opportunities to replace imported parts with domestically produced ones. By identifying which OEMs import specific components, manufacturers can target potential customers and present them with opportunities to reshore their components.
Let’s say one of the sweet spots of your business is shafts. You can use the ISP to determine the biggest importers of products, what tonnage they’re buying, from whom they’re sourcing these parts from offshore suppliers, and what they’re paying for those parts. With this information, you can reach out to the importer to see if they’d be interested in buying from you instead of continuing to source products from overseas.
3. Discuss potential risks with your customers
With ongoing global conflicts and tariff changes, dependency on foreign suppliers is riskier than ever. The Reshoring Initiative offers tools to help manufacturers identify geopolitical risks that could disrupt their customers’ supply chains. We suggest that you set aside some time during your prescheduled customer meetings to explain some of the biggest risk factors. If your customer relies on parts from a high-risk source, your company may represent a far more secure alternative.
4. Leverage workforce solutions like apprenticeship programs
If reshoring remains a priority in this country, it’s critical that we have enough skilled workers to keep up with the demand for labor. One objective of the Reshoring Initiative is to increase domestic manufacturing output by 40 percent, meaning we’d need approximately 40 percent more workers to maintain productivity.
This is where workforce solutions come into play. Robust recruitment, with a particular focus on young talent, can fill any gaps as the baby boomer generation continues to retire. It’s not enough just to get bodies in the shop; providing in-depth training programs ensures your people are adept at handling your advanced capabilities and approaching challenges strategically.
The Reshoring Initiative encourages small- to medium-sized manufacturers to offer apprenticeships to more successfully hire and retain top talent. Investing the time and energy in apprenticeship programs can help bridge the gap and prepare the next generation of machinists.
5. Invest in automation
Here’s a bit of a wake-up call: China has consistently experienced manufacturing labor productivity increases of approximately 6% year over year, according to the Reshoring Initiative. Meanwhile, the U.S. has remained stagnant for the last few decades.
Many offshore manufacturers are investing a great deal of money in automation. For U.S. manufacturers to compete with offshore suppliers, they should invest in modern CNC machine shop equipment and advanced technology to increase production while maintaining high quality. After all, you’ve heard the old adage: If you can’t beat ‘em, join ‘em.
6. Fine-tune your processes
Even when you can’t compete with overseas suppliers on cost, there are two areas where you can shine: faster delivery times and superior customer service! So put in the work to hone your internal processes, focusing on on-time delivery and providing customers with the best experience possible. Because when it all comes down to it, cost is only one of the factors that influence an OEM’s buying decision.
Navigate the Future of Reshoring with NTMA
With trusted industry leaders like Harry Moser championing the cause, reshoring continues to gain momentum on a large scale. For manufacturers looking to remain competitive, we suggest not only following the advice we’ve outlined above but also engaging with your national manufacturing network to stay abreast of the latest trends and best practices.
Are you interested in discovering how you can strengthen domestic manufacturing – and your own business? Learn more about the amazing work of the Reshoring Initiative and reap the benefits of the organization’s illuminating tools. In addition, join NTMA to connect with like-minded small- to medium-sized manufacturers looking to bring manufacturing back within our borders!