Monthly Archives: May 2014

Reshoring And Revitalizing The American Supply Chain Network

By Frank Russo, Chief Executive Officer, / Posted by Jessica Chamberlin

Frank Russo, Chief Executive Officer, of speaks of  reshoring manufacturing as a growing trend in the U.S. After many years of offshoring, companies are taking an in-depth look at the benefits of manufacturing closer to their customer base, leading many companies to reshore or consider reshoring production to the U.S.

U.S. manufacturing is becoming increasingly attractive to global companies and foreign investment due to the costs and risks associated with offshoring production. Escalating offshore wages, interruptions in unstable supply chains and shifting perspectives toward using total cost for objective decision-making, are causing a growing number of manufacturers to consider locations in the U.S.

Many past decisions to offshore manufacturing were based on price alone. Today, manufacturers are looking at more than just price when considering sourcing decisions and production locations. In an interview recently published in Industry Today, Harry Moser, founder/president of the Reshoring Initiative, said companies must look at the total cost of manufacturing such as quality, intellectual-property risk, inventory-carrying costs, the complexities of having a lengthier supply chain and other external and internal business costs. And, considering abundant and low-cost U.S. energy, manufacturing in the U.S. makes good economic sense for foreign and local investment.

Reshoring a Supply-Chain Strategy

Reshoring is not a fad — it’s a real supply-chain strategy based on real economic forces. Companies are making strategic shifts to their supply chain models to take advantage of the benefits of manufacturing in the U.S. I myself see reshoring in our marketplace sometimes several times a week. Every week, we speak with a buyer that wants to source only in the U.S. They want to reshore work, usually back from China, due to quality-control issues, time-to-market, delivery issues, language barriers or simply to be closer to their customers.

When companies source in the U.S., they can take advantage of the world’s largest market and leaner supply chains, since production is located closer to consumers. This affords them the flexibility to quickly respond to customers’ changing demands, a critical component for U.S. competitiveness.

By producing closer to consumers, manufacturers are able to eliminate the large run production requirements and sizable inventories common to manufacturing offshore. They can remove intellectual property risks and realize the benefits of innovation, quality and flexibility by putting American-made ingenuity behind sourcing decisions.

2018-07-31T11:58:28+00:00News|Comments Off on Reshoring And Revitalizing The American Supply Chain Network

America Needs a Manufacturing Strategy

The premise behind the creation of the Domestic Manufacturer and Supplier Coalition (DMSC) is to coordinate a manufacturing platform to help strengthen American manufacturing and all other domestic businesses, large and small. The DMSC believes that to help domestic manufacturing, we must increase public awareness not only on the problems we face but on ways to contact and use available domestic resources.

As many of us know, manufacturing is crucial to any economy and has taken an unprecedented hit over the last 2 years.  According to the article “America Needs a Manufacturing Strategy”, every dollar of  final sales in manufacturing  produces $1.37 in other sectors of the economy in contrast to many service sectors that generates only 50 cents for every dollar of activity.

The DMSC understands manufacturing to be a key element to a recovering economy due to manufacturing being one of the most diversified in regard to employment. A Manufacturing plant employs workers at all skill and education levels and for many non-college educated workers manufacturing jobs, many of which are highly skilled jobs, have been a crucial source of  better then average wages and benefits then usually found with minimum wage jobs. The second piece to a recovery is, innovation. The DMSC firmly believes that innovation is one of the crucial components of any economy and according to statistics, the manufacturing sector in a healthy economy  is responsible for more then 70% of all business R & D.  Unlike many countries who have kept manufacturing as their “economic backbone” maintaining capacity and employment,  the United States has chosen to down size thier manufacturing capacity.

The Domestic Manufacture and Supplier Coalition has created a strategy to increase public awareness on related topics and to drive consumers to invest in all areas of domestic business. The DMSC is providing an essential platform and a unified voice to help strengthen domestic businesses allowing them to strive, not just survive.  The DMSC with it’s current supporters are working with local government officials, advocating to reduce corporate income tax and the payroll tax along with working to eliminate all incentives in the tax code to move investment overseas.  You can join the DMSC in it’s continued effort to increase awareness.  “Strength in numbers allows us to bring solutions to a problematic table and “we believe it’s the right thing to do”.

2018-07-31T11:58:35+00:00News|Comments Off on America Needs a Manufacturing Strategy

Bringing Manufacturing Back to the USA

The bare roots of the DMSC begin with an intense understanding of the issues that face domestic manufacturers. We have found that many manufacturers are experiencing similar issues when dealing with out-sourcing. One such issue is the inability to communicate effectively, which directly effects the ability to control quality. The cost of shipping containers has also become a point of contention with shipping which has increasing dramatically.
 Many American manufacturers have been quoted an attractive bottom line to off-shore and “jumped” with often mis-managed and mis-guided information many times by accountants motivation to look better on the books even if it is for the short term causing companies to at times be pushed into off-shoring. Original quoting cost seem effective until hidden cost such as the need to travel overseas to manage quality control or to finalize assembly, start to add up exceeding the original cost. Rising fuel prices, increases in Chinese wages and other issues according to Archstone Consulting has “90% of manufacturers considering a change or have changed their manufacturing supply strategy”.
Many companies have found it easier to “jump” instead of doing everything possible to evaluate, reduce waist and optimize their own systems. Secondly, According to the Archstone study “the projected costs of off-shoring increased dramatically due to ocean freight costs which have increased 135%, the Chinese Yuan which has gained 18% in value compared to the dollar and Chinese manufacturing wages have increased by 44%. Also, quality and safety concerns where some of the greatest risks faced in overseas products.
The DMSC agrees with Micheal Collins thought that “the trend toward bringing back production from foreign countries will continue as U.S. manufacturers take a holistic look at all the cost and problems associated with out-sourcing”. The DMSC is aware that off-shoring will always be part of our “world economy” but we want to provide our domestic suppliers and manufacturers an opportunity to compete because ‘we believe it’s the right thing to do.
2018-07-31T11:58:40+00:00News|Comments Off on Bringing Manufacturing Back to the USA