Reshoring Initiatives Help Companies Avoid Global Supply Chain Risk
4/6/2011 5:46:00 AM
Supply chain disruptions resulting from natural disasters, labor disputes, supplier bankruptcy, acts of war and terrorism can cause serious problems. The recent disaster in Japan has severely affected the country's manufacturingoperationsand North American operations are also experiencing the impact of this catastrophe.
After years of rapid globalization, companies are beginning to see disadvantages associated with offshoring production, including high shipping costs, inferior product quality and particularly relevant with thecontinued ripple effect of the Japan tsunami, supply chain issues. As a result, a trend known as onshoring, or reshoring, is gaining acceptance among manufacturers. Harry Moser, founder of the Reshoring Initiative, is collaborating with the Association for Manufacturing Excellence (AME) to promotereshoring as part of its "Rebirth of Manufacturing Jobs" initiative in North America. "We are committed to changing the sourcing paradigm fromâoff-shored is cheaper' to âlocal reduces the total cost of ownership,'" says Moser.
"The likelihood of a costly production interruption increases greatly with distance; therefore, a strategy more companies are adapting is shortening the supply chain which reduces cost and risk," says Phil Roether, AME President. "By working closely together as a team toward waste elimination and learning from fellow professionals, supply chain members all benefit and improve their ability to compete on the world stage."
In addition to encouraging reshoring, AME is also a proponent of the President's Council on Jobs and Competitiveness, a national initiative focused on creating jobs, particularly inthe manufacturing sector. This is particularly essential because the manufacturing industry creates more economic activity than any other industry sector, according to the National Association of Manufacturers.
"The President's Council on Jobs and Competitiveness makes businesses more competitive to improve the standard of living of our nation's citizens," says Maria Elena Stopher, AME Chairman. "We strongly encourage others to help AME support this initiative by taking a leadership role. Contact your elected representatives, encourage strong education for the next generation and get involved with regional events and network with like-minded AME members. It is critical that we have a strategy for manufacturing; we owe our children a strong economic base and national security.Without a strategy to bring jobs back, I fear for an even weaker economic position."
Part of AME's support of this initiative includes actively engaging with its members to deploy consortiums, industry clusters thathelp manufacturing professionals increase productivity through shared best practices, drive innovation by offering resources and training, and expand business opportunities through networking. Consortium members participate in resolving problems such as the lack of a trained workforce, regulations and infrastructure for access to necessary resources. Local companies, academic institutions, government agencies, and labor and learning organizations can proactively utilize consortiums to become more competitive and reap the benefitsof shared learning. Taking part in these actions will help companies from aroundthe global avoid supply chain risk.