60 seconds with Harry Moser, Reshoring Initiative
What we’re doing is documenting the trends of the companies that are bringing manufacturing back, why they’re coming back and how many jobs they’re bringing with them. Then, we promote it.
Latest NewsU.S. Port Update Part 1: Infrastructure Shortfalls Driving Innovation December U.S.-bound waterborne shipments finish a strong 2018, says Panjiva JLL report explores concept of industrial ‘Human Centric Design’ High level of December U.S.-bound waterborne shipments finishes a strong 2018, says Panjiva Making the Case for Comprehensive Aftermarket Lift Truck Services More News
Latest ResourceMaking the Case for Comprehensive Aftermarket Lift Truck Services Service After the Sale: Looking Beyond Acquisition Costs
Title: Founder and president
Location: Kildeer, Ill.
Experience: 45 years in manufacturing. Founded the Reshoring Initiative in 2010.
Primary Focus: Educating companies about the costs and factors associated with off-shoring. The objective is to bring manufacturing jobs back to the United States.
Modern: Tell us a little about the Reshoring Initiative.
Moser: What we’re doing is documenting the trends of the companies that are bringing manufacturing back, why they’re coming back and how many jobs they’re bringing with them. Then, we promote it. I give about 100 presentations a year, and we write about 15 articles a year. We try to get companies interested in reshoring, and we help them evaluate their decisions. The crown jewel is our software, which allows companies to make an estimate of the total cost of off-shoring compared to manufacturing here.
Modern: From what you’re seeing, is reshoring for real?
Moser: If you look at the numbers, total manufacturing employment has gone up by about 500,000, which isn’t a lot in a recovery. So, you can’t prove that a renaissance has arrived. However, I can prove that reshoring is real because we calculate the jobs. We calculate that about 80,000 have come back since 2010 and that jobs are coming back now at a rate of about 30,000 a year.
Modern: Have we turned the corner on off-shoring?
Moser: Not quite. If you look back 10 years, we were off-shoring 150,000 jobs a year and reshoring about 3,000 a year. Now, we’re reshoring about 30,000 a year, and off-shoring 30,000 to 50,000. We’re close to balancing the scales. The necessary thing is to convince companies to re-evaluate their decisions about where to manufacture. To do that, we have to convince them that it’s happening. I’m the enabler and the cheerleader.
Modern: If production is coming back, what’s driving the trend?
Moser: There are three factors. One, Chinese wages have been going up about 18% a year over the last 10 to 15 years while U.S. wages are going up 2%. We believe that by 2015, the manufacturing cost in China will be high enough that, when you throw in the cost of transportation, it will be more expensive to manufacture many items there than here. Number two is shale gas. Compared to China, we have high priced labor, but low cost energy. Finally, U.S. consumers increasingly prefer the “Made in the USA” label compared to the “Made in China” label.
Modern: Finally, tell us how the Total Cost of Ownership Estimator works.
Moser: It’s a software application that quantifies all of your costs. A manufacturer might find that their manufacturing costs are 20% higher here than off shore. But their overhead, including transportation, may be considerably less. The question then is whether overhead comes down enough to offset the higher cost of manufacturing it here. If the cost is close, we urge them to call in the consultants. If there’s a 30% difference, it’s unlikely that a lean initiative is going to close the gap. But, if there’s a 5% to 7% difference, perhaps lean or automation can make the difference.
About the AuthorBob Trebilcock Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
2019 Rate Outlook: Pressure Builds Lift Trucks join the connected enterprise View More From this Issue