Is Reshoring Picking Up Speed?
Article courtesy of Art Nicolet
It has also come to light that there were hidden costs to operating in a foreign country that were not accounted for during the early years of outsourcing when companies were calculating the cost/benefits of establishing foreign operations. Turns out, calculations for Total Cost of Ownership were not thoroughly considered in the decision making process.
The result of rising foreign labor costs as well as the hidden operating costs that began to impact the bottom line has been that many companies are re-evaluating their foreign operations. Other factors such as shipping costs, distance from a company's home base in America as well as her consumers, lack of operational control, quality problems which have resulted and many other issues germane to individual operations have encouraged companies to consider moving their operations back to the United States.
Migration back to the United States has already begun. Although there will never be a 100% return to the United States because there are many overseas plants that sell to Asian consumers where it makes sense to have manufacturing close to the consumers, nonetheless, the trend is obvious.
The re-shoring migration has been gaining momentum for the last five or so years with the help of Harry Moser who founded the Re-shoring Initiative in 2010. He helps to educate companies and workers on the benefits of re-shoring and has developed an analytical tool to help companies determine their total cost of ownership. He provides the Total Cost of Ownership (TCO) tool free of charge. You can read an interview with Moser here: https://blog.chrobinson.com/supply-chain/reshoring-harry-moser/
The Total Cost of Ownership can be found here: http://www.reshorenow.org/tco-estimator/
An essential element of the Total Cost of Ownership is an up to date and accurate record of all expenses and services required to keep an operation's equipment and facilities running smoothly and dependably. Without this data to include in the TCO tool, the decision to reshore may be flawed and could cost the company many thousands of dollars.
With Express Maintenance, companies who are considering reshoring have a major tool to assist them in evaluating the decision. Express Maintenance is the most thorough and accurate computerized maintenance management program with over 120 reports to provide companies with the most meaningful cost analysis for use with the TCO tool.
Brown and Associates is an Authorized Partner of Express Technology (ET) Inc. and have 10 years' experience working with ET customers assisting with Product Selection, Implementation, Training, Usage, and Continuous Improvement.
Brown and Associates provides supporting Products and Training Services that enhance and extend the use and benefits that can be derived from Express Maintenance and Express Request.