In our last column, we identified national policies that will help bring manufacturing back from offshore, thereby improving the country’s economy, employment and budget deficit. Now, we would like to discuss how your company can use free resources from the Reshoring Initiative, including the Total Cost of Ownership (TCO) Estimator, to more accurately determine the real profit and loss impact of reshoring or offshoring. After doing so, your company will undoubtedly decide to bring some work back, which will help our economy while we wait for the politicians to act.
Several trends are driving the shift from offshoring to reshoring: the rising costs of offshore production; the impact of distance on innovation, flexibility, responsiveness, inventory and availability; improved competitiveness via automation and lean; and the increased use of the more sophisticated TCO model to quantify the hidden costs and risks of offshoring. Companies are increasingly deciding to use a “local for local” strategy and bring production and sourcing closer to home.