I participate with a group of the top 1% of consultants worldwide (the Society for the Advancement of Consulting), and we hosted two panel discussions on Reshoring in a Post COVID World. I moderated the first session with consultants from North America and the Pacific Rim, and there was another session with our North America and European experts. We had good discussions on all aspects of reshoring from how we got to this position to costs, challenges in moving sources of supply to benefits. Listen and provide us with your feedback and requests for follow-up conversations and other topics as it will be the first in a series of these events.
What Should We Consider and/or What Impacts Could Arise?
Let’s start with the difficult: never outsource, reshore, near-shore or do anything else because it is the popular thing to do. We have many clients and colleagues in common who did just that (often with less than desirable results). Instead, conduct a rapid assessment of your situation. What makes sense for your company and your situation?
I can’t tell you how often I received pushback when VP of Operations and Supply Chain to reduce labor cost. It was the continual mantra yet our largest cost component was material cost and our 2nd largest cost component was freight. So, why should I reduce labor cost at the expense of focusing on the larger priorities? Luckily, I reported to a CEO who listened to reason and was willing to help me fight the uphill battles surrounding this topic.
Review your future customer requirements (not your current ones as 25% of all business will CHANGE post COVID), your product supply network (internal and external) and associated future risks, and your total cost (NOT just your purchase cost or even landed cost). It is a good place to start. Add in your strategic direction and you’ll be well on your way.
Read more about these types of topics in my eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19. Gain ideas and strategies to successfully emerging from coronavirus and thrive long-term. If you are interested in gaining an expert assessment and rapid roadmap tailored to your company, please contact us.
Please share your stories, challenges, ideas and successes.