Oct 23, 2017

Feature in Design-2-Part Magazine Manufacturing Experts Answer 5 Questions on How to Turn the Tide FAIRPORT HARBOR, Ohio—North America’s $137 billion metalforming industry is driven by the production of myriad precision metal products using stamping, fabricating, spinning, slide forming, and roll forming technologies, as well as vital value-added processes. In recent decades, approximately 3-to-4 million U.S. manufacturing jobs were lost to offshoring. The tide seems to be turning modestly in recent years as companies return U.S. production, or sourcing, from offshore. In comparison to 2000-2003, when the United States lost about 220,000 manufacturing jobs per year (net) to offshoring, 2016 achieved a net gain of 27,000. Progressively bridging this gap presents huge collaborative opportunities and challenges for all manufacturers, associations, employees, communities, and the U.S. government itself. The following Q&A explores factors that are key to the collective goal of gaining momentum in successfully returning the manufacturing of parts and products to the United States from offshore. Authors of the Q&A are two men with a vested interest in the subject of reshoring: John Stoneback, president of JM Performance Products, Inc., of Fairport Harbor, Ohio; and Harry Moser, president of the Reshoring Initiative, based in Kildeer, Illinois. JM Performance Products, Inc. has been manufacturing CNC mill spindle optimization products since 2009. The company’s Patented High Torque Retention Knobs overcome a critical “loose-tool” design flaw inherent in CNC v-flange tooling that was responsible for costly, industry-wide issues with CNC milling and boring that negatively impacted production costs, cycle time, and tooling costs. An essential element of the patented design is a knob that is longer and reaches a little deeper into the holder’s threaded bore. As a result, all thread engagement occurs in a region of the tool holder where the diameter is large, and where there is correspondingly more material to resist deformation. The Reshoring Initiative, founded in early 2010, takes action by helping manufacturers realize that local production, in many cases, reduces their total cost of ownership of purchased parts and tooling. The Reshoring Initiative also trains suppliers in how to effectively meet the needs of their local customers, giving suppliers the tools to sell against lower priced offshore competitors. The Initiative is...

Sep 19, 2017

By Tony Uphoff, President and Chief Executive Officer at Thomas Publishing, ThomasNet  An interesting trend we’re seeing is a steady uptick in sourcing related to custom injection molding. This is a promising development for the economy as plastics is actually the third largest manufacturing industry in the country. Our data shows some significant increases in this important category. In the last five weeks on the thomasnet.com platform, sourcing for custom injection molding is up 35% over its all-time average. In the related category of injection molded plastic fabrication, sourcing activity has been higher in its all-time average in eight of the past 12 weeks. As you’re probably aware, American companies offshored a huge portion of their injection molding in recent decades. But when we look at how some companies today are weighing the benefits of reshoring versus offshoring, this upward trend in custom injection molding here in America starts to make some sense. The biggest incentive for offshoring has always been one of cost. But the days of cheap, abundant labor seem to be coming to an end, particularly in Asian countries such as China where there’s a growing demand for higher wages among the workforce. According to Harry Moser at the Reshoring Initiative, more and more companies today are looking at the TCO, or total cost of ownership, of offshoring versus reshoring, factoring in such things as increased productivity, shorter supply chains, and agility and innovation in customer responsiveness. Combine that with things like new tax incentives, lower freight costs, and abundant natural gas pushing down energy prices, and those companies, looking at TCO, are finding that they can manufacture more profitably right here at home. Specific to injection molding, there are also significant quality and consistency advantages to doing it here in the U.S. I speak to our clients regularly in the industry, many who have received overseas tooling from companies that are reshoring. One of those clients, the Rodon Group, reports that the majority of that tooling is virtually unusable here in America. It rarely meets the quality standards set forth by the Society of PlasticsIndustry, which specify things such as tolerances and finishes for injection molded parts here in the U.S. As Rodon’s Jill Worth told me, there’s...

May 15, 2017

Reshoring Initiative 2016 Data Report Reshoring Exceeded Offshoring in 2016: Policy Changes Needed to Maintain Momentum Kildeer, IL. May 15, 2017 — For the first time in decades, more manufacturing jobs are returning to the United States than are going offshore. The combined reshoring and foreign direct investment (FDI) trends grew by over 10 percent in 2016, adding 77,000 jobs (tying the 2014 record) and exceeding the rate of offshoring by about 27,000 jobs. The 2016 results bring the total number of manufacturing jobs brought back from offshore to more than 338,000 since the manufacturing employment low of February 2010. There are still huge opportunities and challenges to bringing back all the 3 to 4 million manufacturing jobs cumulatively lost to offshoring. The rate of job return announcements doubled in November 2016 and hit an all-time peak monthly record in January 2017. Clearly, government policy changes and expectations of those changes are key to accelerating the trend. Overview The Reshoring Initiative’s 2016 Reshoring Report contains data on U.S. reshoring and FDI by companies that have returned U.S. production or sourcing from offshore. The report includes cumulative data from 2010 through 2016, as well as highlights from the first quarter of 2017. In comparison to 2000-2003, when the United States lost, net, about 220,000 manufacturing jobs per year to offshoring, 2016 achieved a net gain of 27,000. The tide has turned. The numbers demonstrate that reshoring and FDI are important contributing factors to the country’s rebounding manufacturing sector. The overall trend was up from 2015 due to anticipation of potential policy changes that will make the United States more competitive, continued rising wages overseas, and increased use of total cost of ownership for sourcing decisions. “We publish this data annually to show companies that their peers are successfully reshoring and that they should reevaluate their sourcing and siting decisions,” said Harry Moser, founder and president of the Reshoring Initiative. “With 3 to 4 million manufacturing jobs still offshore, as measured by our $500 billion/year trade deficit, there is potential for much more growth. We call on the administration and Congress to enact policy changes to make the United States competitive again. Our Competitiveness Toolkit is...

Sep 27, 2016

“How AI & Robots Will Bring Manufacturing Home to the U.S.” By Tom Vander Ark, Getting Smart Imagine custom shirts and shoes at mass production prices with same day delivery; imagine turbine parts produced at the airport where and when they are needed; imagine a new tooth made while you’re in the dentist chair. The age of smart local manufacturing is just around the corner. Often called Industry 4.0, this new wave manufacturing incorporated connected devices (internet of things: IoT), cloud computing and machine learning. The term Industry 4.0 originated in 2011 with German government-funded research on advanced manufacturing. Christoph Roser at AllAboutLean.com explains: The first industrial revolution was the Industrial Revolution between 1760 and 1820ish, which brought us steam power and mechanization through spinning mills. The second industrial revolution was mass production, starting around 1870, but best known for the assembly lines of Henry Ford 1913. The third industrial revolution was the introduction of computers and automation in manufacturing from 1950 onward. The fourth industrial revolution is cyber-physical systems.     End of the Flight to Cheap Labor “Much of the labor intensive manufacturing moved to areas of the world where cheap labor was abundant and had the raw material or the ability to bring them in and ship the product at a reasonable rate,” said Charles Speelman, Superintendent of the Tri-Rivers Career Center in Marion Ohio (below). Jimmy Carter’s inauguration in 1977 marked the peak of U.S. manufacturing employment. Outsourcing really accelerated after Bush took office in 2001. “Everyday low prices” became a staple Wal-Mart thanks to cheap Chinese labor. But in the last ten years, the rise of the Chinese (and Mexican and Vietnamese) middle class reduced the labor arbitrage. Third wave factories invested in automation reducing labor as a percentage of total costs. Beginning in 2010, U.S. manufacturing employment began to rise with the first hints of onshoring. Car manufacturing is an interesting signal: while parts are made worldwide, Hondas are built in Ohio and Alabama, BMW and Mercedes are made in South Carolina, Toyotas are made in Indiana and Volkswagens are built in Tennessee. Automation is making U.S. products more competitive compared with similar goods sourced from low-cost countries. In a 2015...

May 4, 2015

“Reshoring Initiative 2014 Data Report Emphasizes Positive Job Trends” CHICAGO, Ill. April 28, 2015 — The Reshoring Initiative, an organization committed to helping manufacturers recognize the profit potential of utilizing local sourcing and production, has published its annual data report on reshoring trends, and the news is good. More than 60,000 manufacturing jobs were brought to the United States by reshoring and Foreign Direct Investment (FDI) combined in 2014, representing a 400 percent increase since 2003. With only 30,000 – 50,000 jobs being offshored to other countries in 2014, the resulting net gain of 10,000 or more jobs per year represents a shift in the right direction. By comparison in 2003, the United States lost net about 140,000 manufacturing jobs per year to offshoring. The steady decrease in the number of jobs lost, capped by a net gain last year, is building confidence that reshoring and FDI are important contributing factors to the country’s manufacturing rebound. Data for this report comes from the Reshoring Initiative’s Reshoring Library of more than 2,000 published articles, privately submitted reshoring case studies and some other privately documented cases. The report provides data and analysis in 13 different categories ranging from the number of manufacturing jobs lost to offshoring and reasons cited for reshoring to a breakdown of data by industry, country, region and state. It also includes an international summary of cases reshored to other countries. Of particular interest are the reasons companies gave for reshoring and FDI. Government incentives, the skilled workforce, capitalizing on the value of a Made in USA label, and automation topped the list in 2014. At the same time, companies cited lower quality, long lead times, high freight costs and rising wages as reasons against offshoring. The data also indicates that reshoring was strongest in the Southeast and Texas, a trend consistent with The Boston Consulting Group’s (BCG) forecast for those areas to lead the way in becoming competitive with China for the manufacture of products to be sold domestically. Much of this is attributed to the trend for companies to build “green-field” factories in states with lower wages, lower taxes and right-to-work laws. “We publish this data annually to show companies that...