Bringing It Back to America: Reshoring Operations Following Covid-19

March 2020 is a month that no one can forget. The United States began to shut down amid the surge of the novel virus, Covid-19. The WHO officially declared it a pandemic. Americans immediately went into panic buying and hoarding mode. Uncertainty lingered in the air. 

That was not all that America was exposed to. The consequences of the pandemic brought to light huge gaps in the medical supply chain, specifically that far too many companies relied on China for some, part or nearly all of their operation.

In fact, an initiative had already started back in 2010. It is called the Reshoring Initiative. The goal is to bring back all types of manufacturing jobs to the United States. Their approach is to educate manufacturers on their options locally, which in some cases reduces their total cost of ownership of purchased parts. They also work to educate suppliers on how to meet the needs of their local customers with tools to directly compete with their lower-priced offshore competitors. This is a non-profit organization.

What has happened since the beginning of the Covid-19 pandemic is that holes in the supply chain were magnified and the urgency to bring back manufacturing opportunities to the United States intensified. There were temporary trade restrictions combined with a shortage of pharmaceuticals that led to dire uncertainty.

What is Holding Back Manufacturers in the United State From Competing?
There is an abundance of reasons why manufacturers headed across seas, to begin with. To bring it all back to the United States, manufacturers are faced with the following:

• Hiring skilled workers is much more expensive
• Training workers becomes another investment. 
• Developing new methods so less skilled workers can handle production requirements also doesn’t come cheap. 
• Retrieving tools or moulds can be difficult. 
• Ending an offshore contract may require payment of taxes and additional fees. 
• Little incentive or subsidy to remain on U.S. soil. 

How Do Manufacturers From the United States Move Forward?
Ultimately, there is no one-size fits all scheme to correct supply chains and move business back to the United States. There are many microscopic steps that each manufacturer must take in order to bring back their operation to the United States. It might never entail the full operation, but there are things they can do in order to mitigate future disruptions. 

Things to consider include options like:

• Developing a domestic partnership where you sacrifice a higher price in exchange for a premium, on-time delivery commitment. 
• Changing the mind of the consumer that the least expensive product is not always best and domestically made products are easily a better quality version. 
• Consider the opportunity that a domestically made product may have a longer shelf life and a faster response to opportunities. 
• Possibly save on transportation costs. 
• Increase speed of productivity and delivery to become more agile and competitive with bids. 
• Push organizations and programs to help keep manufacturing in America a reality. 
• Factor in reduced international travel, international intellectual property, etc. 
• Eliminate President Trump’s tariffs on your imported goods. 
• Fully understand the savings in reduced overhead costs. 
• Proudly label products: Made In The U.S.A.

What Does the Future Hold for the United States Medical Supply Chain?

The medical industry would benefit the most from any reshoring initiatives. There has been anywhere from 90-95% dependence on imports for medical and pharmaceutical supplies. No matter what, emphasis must be placed on returning some of these supplies back to manufacturers in the United States. 

This did begin after the initial outbreak occurred when the U.S. was tasked with making enough ventilators for the projections of need. In the end, more than enough was built. Harry Moser, founder, and president of the Reshoring Initiative, Kildeer, Illinois explains in detail how medical components became key in the ventilator issue:

“Innovations such as JMPP’s patented High Torque retention knobs (HTRK) are vital to the solution as they can speed up productivity and delivery for these in-demand components. A recent example of this would be Bill Berry, president and owner of Die-Tech & Engineering (DTE) in Wyoming, who was able to provide die-casting dies for ventilator parts for GM in less than one week that was holding up the production of ventilators.”

Innovation, calculating costs effectively, and reducing interruptions will always be the goal moving forward. Other industries will be just as affected like appliances, plastic products, rubber products, fabricated metal products, electronics, apparel, and more.