Tag Archive: reshoring

Paying Attention to Reshoring & USMCA?

July 18th, 2020

 

As supply chain has gained in prominence in the media with the increase in tariffs and the many challenges associated with coronavirus, reshoring has become of keen interest. Surveys are showing it is more than just a passing interest with executives. Instead, it is in motion! Listen to my video on this hot topic.

What’s Happening Video Series

Supply Chain: Reshoring

In addition, the USMCA went into effect as of 7/1. Here are a few of the key components:

1) Automobiles must have 75% of their components manufactured in the U.S., Mexico or Canada to qualify for zero tariffs.
2) 40-45% of automobile parts must be made by workers who earn at least $16/hr by 2023, and Mexico agreed to pass new laws that give greater protection to workers.
3) U.S. farmers gain more access to the Canadian dairy market.
4) Intellectual property and digital trade provisions.
5) Sunset clause after 16 years with a review every 6 years.

What Should We Consider and/or What Impacts Could Arise?
As we are all very distracted with everything going on around us, reshoring and USMCA will change the global supply chain scene. They will impact almost everyone in some way or another. Have you figured out what will change and what you should do differently, if anything? If it doesn’t impact you directly, will it impact a customer, supplier or transportation partner? How will that impact you? Lastly, are there risks and/or opportunities for you to consider?

Have you thought of doing an assessment of your global supply chain footprint? What risks exist? More importantly, what opportunities exist with changing conditions? We address these topics as well as many others in my eBook,  Future-Proofing Manufacturing & Supply Chain Post COVID-19. Gain ideas and strategies to successfully emerge from coronavirus and thrive in 2021.

Please share your stories, challenges, ideas and successes. Contact us and please join in our free webinar series and listen to our archives.



Manufacturing Expert, Lisa Anderson, Forecasts U.S. Manufacturing Resurgence COVID-19 Showcased Technology and Innovation as Key Contributors

June 30th, 2020

CLAREMONT, CALIFORNIA – June 30, 2020 –  Manufacturing and Supply Chain Expert,  Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc., forecasts a resurgence of manufacturing in the U.S.  LMA Consulting Group works with manufacturers and distributors on strategy and end-to-end supply chain transformation to maximize the customer experience and enable profitable, scalable, dramatic business growth.

“The COVID-19 pandemic turned the supply chain on end.  It forced manufacturers to rethink their strategy, their products and their future.  Those who took the time to identify opportunities and used this unique circumstance to leverage technology and innovate are already seeing results. Innovation has always been the key driver to manufacturing success.  We are now seeing it pay off, and, it’s just the beginning,” stated Ms. Anderson.

Innovation has opened not only new product possibilities for manufacturers, but also new relationships for cost reductions and improving the customer experience.  From suppliers and 3-D printing to transportation options due to reshoring, manufacturers have an abundance of opportunity for differentiation and growth.

“China has fallen from favor not only due to COVID-19 and the supply chain disruption, but also because of the arduous policies they implemented early in the year which essentially removed all protections of intellectual property and patents. There has been talk about doing more business with Mexico, but Mexico is best at assembly,” she said.  Manufacturing shifted to China and other countries due to high labor costs in the U.S.  Technology and robotics have leveled U.S. manufacturing costs.  “It clearly comes down to innovation and leveraging technology. U.S. manufacturers are strong and smart.  Sometimes it just takes an extra push or, in this case, an event to force out-of-the-box thinking,” she concluded.

Ms. Anderson recently recorded another video in her What’s Happening in Manufacturing & the Supply Chain series highlighting Reshoring.

 About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD

Lisa Anderson is the founder and president of LMA Consulting Group, Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation.  She focuses on maximizing the customer experience and enabling profitable, scalable, dramatic business growth. Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, 50 ERP Influencer by Washington-Frank, a top 46 most influential in Supply Chain by SAP and named a top woman influencer by Solutions Review. She recently published, I’ve Been Thinking, 101 strategies for creating bold customer promises and profits. A regular content contributor on topics including a superior customer experience with SIOP, advancing innovation and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, tED magazine and the Wall Street Journal.  For information, to sign up for her Profit Through PeopleTM Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.                                        


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Media Contact
Kathleen McEntee | Kathleen McEntee & Associates, Ltd. | p. (760) 262 – 4080 | KMcEntee@KMcEnteeAssoc.com



Being Featured on Bloomberg & the Rise of Reshoring

June 3rd, 2020

Of course, it was very exciting to be featured on Bloomberg’s ‘What’d You Miss?’ show! It speaks to the rising popularity of reshoring that Bloomberg is searching for supply chain experts to talk about reshoring and whether it makes sense.

NOTE: I am about half-way through the segment if you’d like to watch the show.

As I said on Bloomberg, of course, the answer of whether you should reshore is “it depends”; however, it is becoming quite attractive for many industries and situations. At a minimum, review whether it makes sense to source manufacturing closer to your end customers. If you need a push, look no further than the Amazon-like customer requirements, increasing labor costs in China, the lessening importance of labor costs as the Future in Manufacturing panel discussed, the risk of disruption (tariffs, COVID-19, natural disasters etc.) and more. I discuss this topic in depth in my eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19.

 We have also launched a rapid Future-Proofing Manufacturing & Supply Chain assessment if you’d like assistance in evaluating for your particular situation. Contact us if you are interested. Stay safe and healthy. We continue to post coronavirus resources, write blog articles on navigating coronavirus as well as “beyond lockdown” strategies, and we are sponsoring APICS Inland Empire‘s “Navigating Through Volatility” webinar series. Join us and learn more here



The Future of Manufacturing

May 30th, 2020

 

I was on a panel of a webinar, The Future of Manufacturing with Andrew Zanelli, president of VCC, Michael Knight, president TTI Semiconductor Group, and Seth Denson, co-founder of GDP Advisors. It was a lot of fun, and we talked about the coronavirus, reshoring, cost leadership, innovation, and other topics. Are you interested in what the future might look like and how you can position your company and career successfully?                                         

What Should We Consider and/or What Impacts Could Arise?

There is no doubt there is a renewed interest in reshoring and sourcing manufacturing closer to the customer. All panelists agreed that labor cost has reduced significantly in terms of relevant factors to consider in evaluating manufacturing and supply chain strategy.

  1. China’s labor costs have continually risen, leading progressive companies to move to Vietnam and other Asian countries to chase lower labor costs if labor is a significant factor in total cost of their products. Mexico is gaining steam as well as the latest statistics show their fully burdened labor costs are often lower than China.
  2. Advances in technology have reduced the labor component in the total cost of products, sped up the turnaround time and enabled greater customization on demand. Robotics, additive manufacturing, automated equipment, autonomous vehicles are just a few of the advances.
  3. The time component is increasing in importance in today’s environment where Amazon-like customer service is the norm. Lengthy lead times will lead to a loss in customer demand.
  4. Although cash is always king, during the pandemic, it has risen in importance. Product tied up in the supply chain which is typically 3 months minimum for Asian supply to the U.S. equates to dollars tied up that cannot be invested elsewhere.
  5. There is a higher likelihood of disruption the further away production is from customer demand and the more steps to the supply chain (such as ports, trucks, sailing through unfriendly waters).

Whatever was true last quarter or last month is no longer true. Continually reevaluate your end-to-end supply chain requirements. I’ve addressed this topic as well as your strategy, priorities, key trends, and your restart recipe for success in my eBook,  Future-Proofing Manufacturing & Supply Chain Post COVID-19. If you are interested in a rapid assessment, please contact us.

 



Supply chain strategy: Modernization tips from Lisa Anderson

March 27th, 2020

As Published in:  Ratelinx

For business leaders looking to modernize their supply chain, the technology investment is the easy part: Evaluate solutions, calculate the ROI, make your business case, and take delivery. Sure, it can be tricky to get sign off on these tech investments, but it’s a business problem with a logical solution.

The more challenging part is preparing your organization to take full advantage of that investment. That means getting people on board, ready for the change, and developing new processes that take full advantage of the new tech.

“High tech must be accompanied with high touch,” says Lisa Anderson, supply chain consultant and President of LMA Consulting Group, Inc. “The most successful supply chain leaders will remember that people are their number one asset.”

We asked Lisa for her perspective on the current state of supply chain, the key trends that are driving change, and how you can prepare your team for what comes next. Read on to learn what she had to say.

Modernizing Your Supply Chain Strategy

The right supply chain strategy includes technological investments, process refinements, and a change management plan for your team. It should be detailed enough to act upon, but flexible enough to account for changing trends. Here’s how to get started.

Key Trends Driving Supply Chain Modernization

For most businesses, there are two factors that make modernization essential. First, there’s sustainability: Consumers are looking to buy from sustainable companies. That means companies are under pressure to not only work with sustainable suppliers, but to prove they’re doing so.

The second factor is perhaps an even bigger driver for change: The demand for near-instantaneous, free shipping for ecommerce. “In the next five years, customers will be expecting Amazon-like service levels at affordable rates, regardless of the high levels of disruption,” Lisa says. “Reshoring, near-sourcing, and sourcing reevaluation will be major concerns.”

Lisa predicts high levels of adoption for new technologies to meet these demands. “The use of technology such as artificial intelligence, IoT, predictive analytics and other technologies will enable meeting these customer needs while maximizing profit and cash flow,” she says.

 

“In these early stages, it’s important to focus in on the
most relevant data to drive decision-making. ” 

Getting Started with a Modernization Strategy

The actual nuts-and-bolts process of building a strategy is the same as solving any problem in your organization. “Start with the outcomes you’d like to achieve,” Lisa says, “then perform an assessment and gap analysis of your people, processes and technology. Assess your change management capabilities to achieve your outcomes. Finally, design the solution and build an implementation team.”

The process may be familiar, but knowing where to start can be a challenge. The first step should be getting a clear picture of your current supply chain. “Start simply and create a dashboard or availability screen that shows your supply chain status; however, remember that if you don’t pay attention to process disciplines, garbage in will result in garbage out,” says Lisa.

In these early stages, it’s important to focus in on the most relevant data to drive decision-making. But don’t try to boil the ocean: “Data plays a vital role; however, do not get sidetracked and overwhelmed with data. Start with your No. 1 priority, find directionally correct data and enable visibility,” Lisa says. “Once your team and supply chain partners understand this data, move to the second largest priority.”

Once you have your supply chain mapped out, you can start to implement solutions that will pay off in the short term and in the long run. A.I. and IoT initiatives have the potential for a quick win. Lisa says in her consulting work, she’s seeing “Artificial Intelligence and IoT used in predictive analytics and forecasting as top priorities. Getting ahead of customer demand drives significant supply chain value.”

Train and Hire the Right Skill Set

For Lisa, the human element is an often-overlooked, but crucial, part of supply chain modernization. “I’ve found that a more dramatic ROI can occur by aligning the people, even more than the data and the process,” she says.

When bringing in new talent, Lisa recommends looking for data science fundamentals. “Data analytics, the ability to leverage ERP systems and think through down-the-line impacts as well as tying business process to systems design are all part of the equation,” she says. “But we should also look at soft skill requirements, such as the ability to collaborate.” Collaboration, big-picture strategizing, and lateral thinking are all essential characteristics of a modern supply chain expert.

The ROI Potential of Supply Chain Modernization

Remodeling your supply chain is not without risks, and it’s a process that takes time and resources to ensure success. But the rewards are worth the effort. “It depends on the situation, of course,” says Lisa, “but it isn’t uncommon to see a five or 10:1 return on investment from supply chain transformation improvements.”