What Effects Will Reshoring Have?

October 28, 2013

Offshoring caused a lot of problems within the middle-class people of America. Many manufacturing jobs were lost to workers overseas that could be paid a much lower wage and with little to no benefits. This shift has caused many Americans to seek work in other industries, namely the service industry. Unfortunately, the pay is less in many other industries, thus leading to a decrease in economic activity for the United States. However, manufacturing jobs are trickling back in to the United States by way of ‘reshoring.’

Reshoring is offshoring in reverse. Many companies have discovered the cost of doing business in other countries is much more than initial estimates. They have also learned that the quality of their products has greatly diminished, thus tarnishing the name of previously well-respected companies.

Reshoring will have a positive impact on the United States. First, it will bring good-paying, lower skilled jobs back to the country which will put many Americans back to work. Second, the products offered in stores will be of a higher-quality and the words “made in China” will start being the exception rather than the rule.

Reshoring was bound to happen. When middle-class jobs get sent to another country, it has a stimulus effect on that country’s economy. Due to the increased labor, there is an increase in demand. That increase in demand then increases the need for supply and thus more jobs. After some time, the people of the country in question will demand higher wages as they acclimate to a higher standard of living. When that happens, businesses find that it’s no longer cost-effective to do business in that country.

Bringing jobs back to America will be one of the best things that can happen – especially manufacturing jobs. The United States used to be the largest importer of raw materials and the largest exporter of finished products, but after the offshoring craze, that role has nearly reversed. With manufacturing jobs returning to the United States, there will be an increase in economic activity which may just pull us out of the recession we find ourselves in today.

MBR Consulting


Headine from Manufacturing Executive: Caterpillar Reshores Japanese Production Back Home: Part Of A Trend?

December 27, 2011

Caterpillar said, “It was moving the production lines from Japan to reduce logistics costs, improve delivery times, and be able to respond faster to the customers who now use most of these products in the Americas and Europe.”

Welcome news indeed. It seems that the reshoring initiatives are picking up steam. I recently heard of other manufacturers that are bringing their jobs back to the USA. Apparently they all realize that it wasn’t all that good for them. Not too long ago one manufacturer’s rep and I discussed his company’s offshoring by telling me how the labor costs here were too high and the company that he represented had to produce in Asia where the labor costs were lower. This company is a B to C company and sells retail here in the U.S. Now that they have moved back here, their retail prices have actually LOWERED!

If this is indeed a trend, being the optimist that I am, I think that we will start seeing more companies returning to the U.S. I know the logistics of a return are difficult (a building has to be set up for production, machine tools have to be considered, etc.) but they are not insurmountable.


Challenges

November 21, 2011

Because an Industrial Engineer works on a number of different type of projects: plant layouts, CAD, work measurement, and the like, people will ask me what is my favorite type of project and which one do I like the least. That is a difficult question to answer. While it is true that some projects are more interesting than others, I find that the challenge involved in any particular project is the part to be savored and enjoyed. The old stand-bye’s like work measurement are challenging enough in and of itself. Plant layouts and anything that uses CAD are challenging because of the thought that goes into the layout and translating that thought into CAD. The most challenging, however, is anything new. Social Media management can be the most challenging, right now, because of the unknown paths that I can follow. Every turn can be something new by itself. That leads to great fun!


Why I Can’t Say NO!….

November 14, 2011

Some of the new techniques that I learned because “I Just Can’t Say No” are:

Data base programming.  I’ve written some applications for clients to help them in their day-to-day operations. Some keep track of their sales force and the commissions earned, scheduled machines, and absences. I even programmed some spreadsheets.

Social Media Management. Everyone uses Facebook and Twitter, but there are some techniques to using them effectively. Also there are other places on the internet to get one noticed.

CAD. While I have been using CAD to create plant layouts and piece part drawings, I had to learn some 3D techniques.

Different techniques. There is always something new to learn to keep the old ways fresh. While some things will always stay the same, there will always be new and better ways to achieve them

Whatever the client needs to get their job done. New and improved ways of doing the old techniques are always coming along. If I don’t learn or do them, someone else will. Once learned, I have used these techniques for different clients.


I Just Can’t Say NO!…….

November 7, 2011

As a consultant, I am continually asked to do projects that require me to learn something new. Consequently, if I want the business I have to say yes to almost any project that comes my way. Therefore, I have said yes to some projects that I don’t know how to do at that time. After I leave the client, I have to figure out how to do what it is that they want me to do. Through the years I have learned how to do multiple new things. I have learned how to write data base programs, I have learned how to use spreadsheets to better advantage and some CAD drawings that I wouldn’t have otherwise known how to do. When it comes time to billing the customer, however, I will not bill them for the time that it took to learn the new project. However I will have gained the knowledge how to do it for another time and it has come in handy for some later projects. Have you found this to be true for anything that you’ve done?


Work Measurement . . . . .

July 5, 2010

One of the building blocks for Industrial Engineering is the time study. Almost everything in manufacturing is derived from this humble beginning. So the question is how do you do a time study? What is the best method to use, both in choice of timing device to use and in work place arrangement.

The first timing device was the somewhat reliable stop watch. One had to look at the watch while one of the hands was flying across the face of the watch and try to read the time and then turn their attention to the paper on which the times were recorded. A lot of missed motions, but the best that was available at the time. One could also use a predetermined time system. Every motion was recorded in sequence and a specific time value for each little finger squiggle was applied. Tedious, but effective. Fast forward now to the 21st century. The stop watch has been replaced by the PDA. That means that with the press of the “enter” button the time value for a sequential element can be automatically entered and the total time can be calculated with more accuracy than the original stop watch. Much easier to use, I might add.


Offshore Production……….

June 24, 2010

Recently I posted a question on LinkedIn about the REAL cost to produce offshore. The responses were very interesting and telling. There were the usual responses about the labor rates being lower than in the U.S. I can understand how that would be important in a labor intensive environment such as a call center, but I question the value in a capital intensive environment. The responses ranged from broken products to mis-marked products to long delays to safety stock inventories at home. All of these add costs but add no value. There hasn’t been a single response as to tax benefits. How is this cycle of offshore production overturned and production brought back to the U.S.?


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