The new upholstery plants being built in Mississippi and the furniture factories reopening in North Carolina are part of a larger trend, and a good one. Reshoring is now part of the dialogue on American manufacturing and the economy.
Harry Moser, the founder of the Reshoring Initiative and former executive for an American high-tech metalworking equipment manufacturer, took part in the Insourcing Forum hosted by President Obama in the White House in January. The meeting included panel discussions with industry leaders and cabinet members and a speech by the president. Participants shared their experiences in bringing back manufacturing jobs back to the U.S.
Hidden costs of outsourcing
Many American companies make sourcing decisions based on price and ignore the total cost of sourcing offshore, Moser explained. Increasing awareness of the total cost of ownership has been one of the Reshoring Initiative’s primary objectives and the January event represents a major milestone in that effort.
Stateside manufacturers can go to www.reshorenow.org to see the Total Cost of Ownership Estimator, a free tool that companies can use to determine costs and make comparisons in the sourcing decision.
The Reshoring Initiative wants to bring manufacturing jobs back to the United States by helping U.S. manufacturers recognize the profit potential of local sourcing and production.
Lower volume, innovation priority
Moser told CabinetMakerFDM that companies that are bringing manufacturing back to the U.S. are generally those that should not have offshored in the first place. These companies may deal in lower volume, require lower labor content, a place a priority on innovation.
Overlooked costs in outsourcing include intellectual property risk, delivery, quality, and the impact on innovation from separating manufacturing from engineering.
For 2012, the Reshoring Initiative plans to analyze its database of users of the online Total Cost of Ownership Estimator, look at the cost to society due to the missing employment, taxes not paid, and unemployment paid due to offshoring. The initiative also plans to develop a library of 300 published articles for analysis of the reshoring trend, and templates for companies, magazines, and associations to post reshoring successes in a standard branded format. We’ll have more about this important group at www.cabinetmakerfdm.com.
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