Home Turf

Reshoring manufacturing to the U.S. is a hot-button issue that encompasses surface cleanliness in addition to a host of other considerations—product quality, worker safety, environmental issues, customer satisfaction, supply chain management, national security and economics.

“The reality is that people are losing their homes, their jobs, their nest eggs,” says Jean Mozolic, president of The Mozolic Consulting Group (Wrenthem MA), “They ask, ‘why are we sending work to India or wherever? We should do the work here in the U.S. Manufacturing is what the U.S. grew from.”

Harry Moser, founder of the Reshoring Initiative and retired president of GF AgieCharmilles, agrees. “The U.S. balance of trade deficit is $500 billion per year and growing,” he says. “We need a neutral balance of trade, or other countries will stop sending us products, and U.S. wages and living standards will suffer.”

The other side of this issue is protection of U.S. intellectual property, as noted by Satish Dixit, director of engineering/R&D at Plasma Technology Inc. in Torrance, CA.

“Companies are not only outsourcing jobs but also giving away technology,” he says. “Outsourcing has to be judiciously chosen, with a view to future consequences.”

In emerging markets, regulatory control of manufacturing is often less stringent. Moser says a supplier may subcontract to another group with less process control and with an inadequately trained workforce with high turnover. Quality of environmental regulations, concern for employee safety, and employee understanding of cleaning processes are all interrelated. Although stringent regulatory requirements can hamstring industry, if the incoming air and water are polluted, it is difficult to achieve critical cleaning of high value products.

“Exporting production may result in a less expensive product,” says Kenneth Karmin, CEO of Ortho Mattress Inc. (Los Angeles), “but people are being put into unsafe and unhealthy working conditions.”

So can we reshore everything? How much is really practical? Mozlic is torn. “My business involves U.S./India collaboration,” he says. “Part of me says that we should keep as much as possible in the U.S; but that may be a short term fix. I view this as a global economy. There are valid reasons for outsourcing outside the borders of any country, not just the U.S. Factors include technology, economics, the labor force, and the ready availability of raw materials.”

Moser cites a 2009 survey from Archstone Consulting indicating that 60% of manufacturers use cost models that ignore 20% or more of offshoring costs.

“I think that if companies would accurately calculate the complete costs of outsourcing, they would bring back between 15 to 25%.  With lean manufacturing and better employee training, we could bring back more.”

Cleaning processes in particular are often more expeditiously managed with a local supply chain that promotes face-to-face communication and direct process observation. Many manufacturers select nearby cleaning chemical and cleaning equipment suppliers to expedite responses to complaints. In bad-case scenarios, supply chain cleaning problems on the other side of the world have been traced to the use of laundry soap—definitely not suited to precision sub-assemblies.
Moser says more manufacturers should consider the benefits of clustering—having manufacturing and engineering geographically accessible to each other.

“Clustering can promote customization, avoiding commoditizing a company’s products,” he says.
“If you have a long, geographically-scattered pipeline and the customer asks for the product in blue instead of red, it may take three months.”