The world of manufacturing never stops changing. One recent trend that appears destined to remain a major industry theme in the coming years is reshoring— the practice of returning outsourced production, assembly and manufacturing processes back to the geographic location from which they were originally removed.
Why is this happening? Increased wages in low cost countries, quality issues, logistics and shipping costs, and a variety of other factors.
Manufacturing Business Technology’s blog post: Reshoring: A Key Strategy Facing Present and Future Manufacturers does a good job of explaining the topic in a thorough, yet straightforward manner – and, more to the point, it offers some good food for thought for those considering reshoring some or all of their overseas production.
What first piqued our interest about this piece was author, Guy Morgan’s statement that “The challenge… is to not make the same errors in reshoring as occurred in outsourcing.”
Instead, he says, companies should consider the following:
- Customer focus on manufacturing locations – make sure to keep the focus on Quality, Delivery, Cost and Technology.
- Supply chain capability – evaluate whether your supply chain partner is capable of participating actively in the early stages of product and process development.
- Manufacturing capability – think about whether your supplier has the latest capabilities and uses the best methodologies. Do they use a technology-based model? Use Lean best practices?
Morgan also details the characteristics and qualities that enable some companies to thrive and prosper through reshoring while others remain unprepared and unaware of how to efficiently and cost effectively “reshore” operations. In order to satisfy customers and keep their business, it’s important to run your organization using lean principles, especially:
- Standard work
- Quality at the source
- Material flow
- Error proofing
- Value stream mapping
Over the next several years reshoring will continue to have a huge impact as companies look to manufacture and assemble their products closer to demand.
This requires a much more nimble supply chain strategy that lends itself quite well to G&D’s capabilities and expertise.
G&D can assist in a number of areas including:
- Manufacturing Support Services
- Distribution and Aftermarket Parts Support
- Transportation – with asset and brokerage capabilities
If your company is looking to improve its agility and ability to move quickly with volume and market shifts, fill out the form to the right and contact us today.