In part 1 of our two-part series on automation and reshoring, we discussed how implementing automation offsets higher wages and increases efficiency and competitiveness, thereby accelerating reshoring. In part 2, we will review additional cases and discuss how to use total cost of ownership (TCO) and automation to enable reshoring.
Most companies make sourcing decisions based solely on freight-on-board price, or at most landed cost, often resulting in a 15 to 30 percent understatement of offshoring costs. The TCO Estimator, a free online tool, guides companies through a comprehensive system for recognizing and quantifying all of the costs and risks associated with offshoring and reshoring. Supply chain companies should stay focused on selling against imports using total cost analysis to remove or minimize the price gap. Companies can then use automation to close any remaining gaps.