United States manufacturing is at a critical juncture. Russia’s invasion of Ukraine, the sanctions imposed for doing so and new pandemic-induced shutdowns in China are adding to the pain of already distressed global supply chains.
Resiliency concerns revealed by the COVID-19 pandemic are driving companies to embrace sustainable manufacturing for post-pandemic supply chains. Supply-chain sustainability is the management of environmental, social and economic impacts. Reshoring checks all of the sustainability boxes since it reduces environmental impact, has a positive societal effect and stimulates economic activity.
A properly skilled manufacturing workforce is the top U.S. priority for achieving global cost competitiveness and the growth needed for a robust economy. Our growing skills gap threatens to erode U.S. manufacturing competitiveness and thus our economy. A talent pool with a sufficient supply of properly skilled candidates is imperative in meeting U.S. manufacturers’ needs for capacity, productivity and innovation.
Since 2010, more than 4,700 companies have brought back some or all of their manufacturing operations and sourcing to the United States. Despite COVID-19, reshoring set a new record in 2020. The job total for 2020 is 109,000 for reshoring and 51,000 for foreign direct investment (FDI), which brings the total to over 1 million U.S. manufacturing jobs added from offshore since 2010.
Hard lessons learned from the 2020 pandemic taught us that we needed to rebuild and re-establish our U.S. supply-chain ecosystem. The systemic shock to our global supply chains left us with bottlenecks, shortages and an acute awareness of our overdependence on imports.
My last column was a brief introduction to the Reshoring Initiative’s resources and some best practices regarding what companies can do to accelerate reshoring to gain business. Now we would like to discuss in more detail how your company or your customers can use the free online Total Cost of Ownership (TCO) Estimator® to more accurately determine the real P&L impact of reshoring or offshoring. Doing so will probably prove that some work should come back.
The mission of the nonprofit Reshoring Initiative is to grow U.S. and North American manufacturing by 40%, eliminating the trade deficit. The objective of this column series is to help you get more than your share of that growth.