Reducing Risks Associated with Global Trade Disruptions

When people speak of supply chain resiliency, they are loosely addressing the 25 to 40 specific touch points from the manufacturing shipping dock in an Asian country all the way to the receiving dock of an American retailer’s distribution center.  Using the Pareto Rule, for all intents and purposes, ocean travel is where the risks occur, and reshoring eliminates that risk entirely.

Reshoring Gives American Consumers the Choices They Want

Companies make much fewer consumer goods in the America these days. How do we meet the desire to actually buy American-made products? Everyone says, “Yes, I want to buy American,” but since there are no American-made options on the shelf, they buy the offshore brand and then move on with their lives. There are gobs of surveys that indicate pro-American sentiment for American-made goods.

Focus on Readily Available Raw Materials

Today's class will focus on product sets that can and should be produced in the Carolinas and Georgia in large part because of the ready availability of the raw materials needed to support the manufacturing process. Even a couple of raw material options that may not be highly available in the HermitCrab territory are still easy to come by in the greater Southeast region.

Navigating Grants, Loans, and Financial Incentives

HermitCrab needs a customer to get started. Home Depot can fund the entire end-to-end reshoring of a currently offshore product for less than .01% of their SG&A expense, and this is the kind of project that will garner shareholder support and enthusiasm. Money is where the “rubber meets the road” - nothing happens without cash flow - this is just a rounding error expense for most large enterprises.

Reshoring Allows Universities to Provide Significant Expertise

Today, we discuss how Universities provide services to support reshoring products back to the United States. Let’s face it – when corporations decided to offshore manufacturing, they did not plan to bring it back. There’s no muscle memory for reshoring, we will need the help of the academic community to round out the skills gaps to make sure the reshoring occurs smoothly.

The Essential Products Best Suited for Reshoring

HermitCrab argues government funding of favored industries is misguided and wasteful. If we intend to regain our manufacturing base, we need a multi-pronged approach that includes long-term incentives, a tariff policy to supports green-shoot manufacturing, and a national conversation about why spending an extra dollar on a rake or shovel at a hardware store is good for America.

Not Every Reshoring Plan is Equally Good for America

Even in the mid-to-late 80s, American companies were using offshore suppliers to do the “hard work”, while finishing the product assembly in the US and calling it “Made in America”. This is one of many versions of reshoring being deployed today, and while it is certainly a job creating possibility, it's a little bit like consuming a Twinkie™- it might look good and taste good, but it's full of empty calories.

How to Effectively Create the Reshoring Strategy

The United States has been fat, dumb, happy, and mostly oblivious to our decline as a nation. We sit in a hot-tub paradigm of profit-seeking and taking the easy way out. It is time for us to shift our paradigm back to doing the hard work of reshoring, but we need to start with a little inspiration. Let’s talk about the Strategy of Reshoring. The perspiration will come in a later class.

The Importance of Workforce Training for Reshoring Success

Despite the obvious reasons to bring our manufacturing sector back to life via reshoring and Foreign Direct Investment, there seems to be no shortage of hand-wringing worriers in the think tank business that complain that the United States isn’t ready for bringing jobs back.  The most common cause of worry – the lack of skilled workers.

How Reshoring Can Revive Small Towns & Communities

Mill towns are a thing of the past, but serve to remind us that changes are always on the horizon, either better (new forms of power allowed larger factories to rise away from the water) or worse (offshoring to our adversaries). The net effect is that small towns suffered, shriveled, and shuttered. Only a manufacturing renaissance can bring some of these towns back to life. We need to start now.

The Benefits of Converting an Empty Shell Versus New Site Development

Ross Perot was a businessman from Texas that ran for President in 1992. A hot topic at the time was the pending NAFTA deal. Perot argued against it, and said this in the 1992 Presidential Debate:

We have got to stop sending jobs overseas. It's pretty simple: “there will be a giant sucking sound going south…you've wrecked the country with these kinds of deals”

Sound familiar? Perot was 100% correct

The True Costs of Offshoring and the Benefits of Bringing it Home

80-90% of an iceberg is unseen, below the surface of the ocean. The same is true for offshored products, much of the costs are hidden. For decades, the Lowest Landed Cost was the driver for offshoring, without enough regard to the dozen or more costs that are incurred through offshoring that would be avoided by making goods in the US. 90% of the hidden costs are below the waterline.

Understanding Supportive Policies and Incentives

The subtitle is “Understanding Supportive Policies and Incentives”, and we will spend the majority of time discussing that topic. Consider the axiom of the “carrot and the stick.” In this case the carrot would be supportive policies and incentives, and the stick would be burdensome taxation and regulations. Looking at it that way, the carrot resembles baby carrots from the store, and the stick would be an oak tree.

Leveraging the Latest Technologies for Improved Operations

Well into the 1970s, American manufacturing was generally fat, dumb, and happy. The post-war industrial landscape in Europe and Asia was in rebuilding mode, and American manufacturing became driven by layers of supervision and was run mainly through the use of manual documentation. Technology needed to evolve, and it took too long to save a lot of jobs.

The Ecological Benefits of Reshoring. An ESG Dream

Environmental, social and governance (ESG) is a framework used to assess an organization's business practices and performance on various sustainability and ethical issues. It also provides a way to measure business risks and opportunities in those areas. ESG is important because it helps identify and manage risks, improve social responsibility, enhance long-term sustainability, meet stakeholder expectations, navigate and comply with regulations, and improve access to capital.

Reducing Dependency on Foreign Countries/Adversaries

The United States imports over a trillion dollars more per year than it exports. Economists have discussed this topic for decades, but the position of HermitCrab aligns with the notion that our economic security and global leadership position suffers a steady decline for every year we experience these large trading deficits. This is a topic that is worthy of a PhD thesis, but we will keep our thoughts to under five pages.

How "Made in America" Enhances Brand Loyalty and Trust

These days, most items you purchase inside of any department store, home improvement store, or specialty retailer aren't labeled as being “Made in America”.  There might be a bar code sticker or fine print on the tag, but the plain fact is that it doesn't matter, because rarely, if ever, do you find a side-by-side product choice of an American-made product next to, say, a Chinese-made product.

Improved Product Quality Through Domestic Manufacturing

In the early days of offshoring, many pundits clucked their tongues at the quality of products from Japan, then China, then the greater Asian Rim (South Korea, Philippines, Vietnam, and so on). HermitCrab thinks this gap has not only been closed, but the quality and complexity of products from our Asian trading partners exceeds any claims American Manufacturers may have once had. the US.

Ten Benefits from Reshoring on the Logistics Supply Chain

Reshoring offers numerous supply chain advantages, particularly simplification of steps required, minimizing the distance travelled, streamlining control points, rapid changes to orders, reduction of in-transit damage, reduced tariffs and dock fees, smaller order sizes, and ESG benefits. Combined, these benefits contribute to more sustainable, responsive, and efficient supply chains.

How Reshoring (and FDI) Brings Jobs Back to America

HermitCrab wants to see American companies take the long view and build their manufacturing and R&D internally to create the industries of the future, but there’s too many challenges to count for that to be a reality anytime soon – so let’s focus on jobs we can bring back under the umbrella of Made in the USA, and owned by the USA.