Bringing manufacturing Jobs Back Home
To Offshore or Reshore?
How to Objectively Decide
SMA
Harry Moser
President
Reshoring Initiative
Definitions
Reshoring/Backshoring/Onshoring/Insourcing:
Bringing back manufacture of products that
will be sold or assembled here.
 Producing near the consumer!
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Geographic sourcing alternatives
Flawed company economic model
60% of manufacturers:
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Apply “rudimentary” total cost models
Wage Arbitrage
 PPV (Purchase Price Variance)
 Landed Cost
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Ignore 20% or more of the total cost of
offshored products
Source: Archstone Consulting survey, American Machinist Mag., 7/16/09
“Manufacturing Is Expected to Return to America”
“Renaissance in Manufacturing”
 “We
expect net labor costs for
manufacturing in China and the U.S. to
converge by around 2015”

“take a hard look at the total costs”
Source: Boston Consulting Group press release 5/11 & 4/12
Chinese no longer “just thankful not to go hungry.”
Source: Michelle D. Loyalka, 2/17/12 NYT
The Industry-Led Initiative Provides
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Free Total Cost of Ownership (TCO) Software
for companies and suppliers
Online Library of 400+ reshoring articles
Case Study template for posting cases.
Media coverage of the trend: WSJ, Fox
Business, USA Today, IW, CBS, CNBC, etc.
~100 presentations/year nationwide
Motivation for skilled manufacturing careers
Solutions to major supply chain problems
TCO Estimator benefits
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Provides a single TCO for each source
 Flexible: values are 100% user selected.
 Broad:
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Easy to use:
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29 cost factors.
Via pull down menus you automatically insert:
 Freight rates for 17 countries
 Duty rates for parts or tools, e.g. molds
Current value and 5 year forecast of TCO.
Explanations and references to help select values.
Free
TCO Comparison Example
Even Landed Cost Misses a lot of TCO
Source: TCO user 2012 database 27 cases China vs. U.S: Median values
Some Reshorers
Water-heaters
Bringing Production back from China:
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Water-heater production
Unionized facility in Louisville, KY
400 jobs, renovated facility
Reasons:
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Tax incentives
High-tech new model
Ease of design collaboration with workers: cut cost $20
2 tier contract
Chinese cost: -30% becomes +6% considering inventory
and delivery problems
Will move a “significant piece” of appliance
production back
Reshoring is happening!
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34% of larger companies surveyed “are considering
bringing manufacturing back to the U.S.” (MIT Forum for
Supply Chain Innovation 2012)

40% of contract manufacturers have done reshoring
work this year (MFG.com 4/12)
 % of U.S. consumers who view products Made in
America very favorably: 78% (2012) up from 58%
(2010) (AAM June 28-July 2, 2012)
 More likely to buy U.S. product 76%
Less likely to buy Chinese product 57%
(Perception
Research Services Intl. survey 7/12, 1400 consumers)
50,000 Manufacturing Jobs
since Jan 2010!
 Reshoring
yielded:
 About
50,000 manufacturing jobs*
 ~ 10% of manufacturing job growth since the
Jan. 2010 low
 ~ 100,000 total, including multiplier effect
* Source of estimate: Reshoring Initiative tabulation of jobs listed in 287
Reshoring Library articles, 85% published since Jan 2010
BCG’s Tipping Point Industries
 Computers
and electronics
 Appliances/electrical equipment
 Machinery
 Furniture
 Plastics and rubber
 Fabricated metals
 Transportation goods
U.S. Manufacturing Nears the Tipping Point, Boston Consulting Group
Industries of published cases
Industry
Number
Elec. equip, appliances & components
Transportation equipment
Computer and electronics
Machinery
Miscellaneous
Plastics and rubber
Fabricated metal parts
Furniture
Clothing and textiles
Food and beverage
Primary metals, food and beverage
Library, July 2012
Source: Reshoring Library, March 2013
46
34
25
21
19
16
16
12
4
4
2 each
Reasons for reported cases
REASON
Wage and Currency Changes
Quality, Warranty, Rework
Freight Cost
Delivery
Travel Cost/Time or Local Onsite
Inventory
Intellectual Property Loss or Risk
Total Cost
Communications
Image/Brand (prefer US)
Difficulty of Innovation/Product Differentiation
Loss of Customer Responsiveness
Price
Natural Disaster Risk
Green Considerations
Government Incentives
Burden on Staff, Political Instability,
Personnel Risk, Regulatory Compliance
Reshoring Library 3/13
# of CASES CITED
72
51
44
43
38
26
25
22
20
17
10
9
7
6
4
4
3 each
61% of reshoring cases are from China
Country from which reshored
China
Mexico
Japan
Number
105
21
12
India
Taiwan
Canada, Spain
Germany, Malaysia, Philippines
8
5
3 each
2 each
1 each
Brazil, El Salvador, Indonesia, Hungary,
Singapore, UK, Venezuela, Guatemala,
Singapore, Malaysia
Source: Reshoring Library 3/16/13
Potential for reshored jobs is huge!
Scenario
Source of
Scenario
Today: If all
Reshoring
companies used TCO Initiative
By 2015: If Chinese
BCG
wage trends continue
Mfg.
Jobs*
~500,000
Total
Jobs**
1,000,000
1,000,000
2,000,000
Better U.S. training,
~AMP
2,000,000
process improvement, (Advanced
automation, tax rates Mfg.
Partnership)
End of offshore
Most mfg.
3,000,000
currency manipulation trade groups
4,000,000
6,000,000
* # of jobs is cumulative. ** Assumes a low 1.0 Multiplier Effect.
Gaining support in Washington, DC
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Commerce Dept:
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2012 budget specifies TCO.
Links:
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http://nist.gov/mep/reshoring.cfm
http://business.usa.gov/program/reshoring-initiative
http://www.manufacturing.gov/other_orgs.html
 Major
new site:
http://acetool.commerce.gov/
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6 rounds of free MEP webinars, next 6/12/13
Testified at Congressional hearing on 3/28/12
Working actively with SelectUSA
Calls from:
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United States-China Economic and Security Review
Commission
White House National Economic Council
1/11/12 Insourcing Forum
But how do apprenticeships and credentials pay?
What can you do?
Use the tools. Free at www.reshorenow.org
 Reshore. Help your customers reshore
 Use our archived webinars to inform staff and
customers
 Call on me to speak at: open houses,
webinars, customer industry conferences
 Post a link like http://www.presflex.com/american-made/
 Submit cases of customer reshoring to
promote your company and steel
 Help me find a big U.S. “poster company.”
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Investment
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By understanding:
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Your U.S. customers can:
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the advantage of producing near the consumer, and
the small TCO gap instead of the large price gap
justify domestic investment, process improvement,
automation, training, etc.
And do not have to sacrifice quality,
delivery, time-to-market, or employees to
be competitive and profitable.
A not-for-profit with 47 sponsors
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A not-for-profit with 47 sponsors
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Help slow the offshoring flood now!
Contact:
Harry Moser
Founder and President
847-726-2975
harry.moser@reshorenow.org
www.reshorenow.org
Recruiting trainees for the skilled manufacturing workforce:
http://tinyurl.com/33vpz9k