Tag Archive: reshoring

Reshoring: Is It All Hype or Action?

September 20th, 2020

According to a Thomas survey about COVID-19’s impact on U.S. manufacturing and industrial production, 64% of manufacturers are likely to bring production back to North America. It has gone beyond talk to action. Clients and colleagues are seeing an increase in inquiries related to reshoring and expanding manufacturing capabilities.

Even before COVID-19, executives were interested in reshoring. The total cost has come into alignment (and is often preferred) in North America for non-commodity products. Tariffs exaggerated the situation, prompting executives to consider the investment of capital to repurpose, expand and build manufacturing capabilities. When inventory carrying costs, transportation costs, intellectual property costs, management and overhead costs, logistics costs and many others are considered, the equation often flips on its head. Excess inventory also ties up cash unnecessarily.

Although costs are relevant to remain competitive in the global economy, it is even more compelling when executives look at the customer side of the equation. In today’s Amazon-impacted, fast-paced environment, customers expect immediate delivery of customized products and services with the ability to change orders based on the latest customer and consumer requirements at the last minute. The last mile has become the last minute. In fact, customers not only expect to change orders while products are out for delivery, but they also expect easy returns and replacement products as a typical standard of service.

Continue reading….. on Brushware or LMA and watch our video on reshoring (also below).

Read more about product supply strategy and related concepts in our eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19. If you’d like a rapid assessment and recommendations for your situation, please contact us.

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Should We Be Reshoring?

August 14th, 2020

Are you thinking about your product supply strategy? You certainly should be! I was asked to talk on Bloomberg’s “What’d You Miss?” about reshoring since it is a hot topic in the news. I was also on a webinar with other CEOs and thought leaders recently about the Future of ManufacturingThe reshoring conversation took the majority of the hour because it was top of mind for manufacturers as well.

The surveys are ‘adding up’:

  • According to an EY survey, 83% of executives expect a regionalization of the supply chain.
  • According to Supply Chain Dive, 64% of manufacturers say reshoring likely following the pandemic.
  • According to Thomas Industrial Survey, 64% of manufacturers are likely to bring manufacturing production and sourcing back to N.A.

It doesn’t matter which survey is your favorite, at least review your product supply strategy in light of your current and most likely future conditions. As I said in my eBook on product supply strategies, there are many reasons compelling manufacturers to look at this topic. A few highlights include:

  • Customer demand: Customers don’t care where we produce or source what. They expect immediate delivery of customized products and services.
  • Customer changes: Customers expect to change their orders as their customers’ demand changes.
  • Total cost: Total cost is in alignment for non-commodity products. Mexico and the U.S. provide good alternatives for customer demand in N.A.
  • Working capital: Cash is relevant.  When you account for disruptions in your end-to-end supply chain as well as changing demand, it can become a significant number to watch.
  • Risk & Disruption: Look no further than COVID-19 to understand the impacts. Asia shut down for a few months. Mexico and Europe were unable to supply essential businesses in the U.S. according to multiple panels (aerospace executives, large CPG etc.)

With all this said, as I commented on Bloomberg, NOT all situations make sense for reshoring (and certainly not at 100% by tomorrow morning). Instead, use uncommon common sense, conduct a rapid assessment and develop a strategy and path forward. Also, put triggers in place to proactively manage and adjust as needed. If you’d like to discuss further, please contact us.



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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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