Product Selection

What are the Top Considerations for Reshoring Product Selection?

When it comes to reshoring manufacturing back to the US, there are at least 5 main decision criteria that should be considered when selecting the right products to reshore. They include:

1) Raw Material Availability – The United States finds itself in the top five globally in almost every raw material sector, namely, wood, cotton, ceramics, plastics, and paper. Much of our raw material availability is exported to other countries for value added manufacturing. Locating reshored manufacturing close to the sources of these raw materials gives the US a distinct advantage in numerous product categories.

2) Legacy Assets and Labor Expertise – Since many industries were offshored over the last 30 years, leaving behind empty factories and equipment, there still remains manufacturing capability and expertise inside the US. The addition of new technologies allows for this expertise to be applied remotely, allowing, for example, an expert in Buffalo, NY to provide detailed instructions to a factory in South Carolina.

3) Product Simplicity – HermitCrab’s first generation product focus is oriented around simplicity. Typically, our focus will be on products that do not require chips, batteries, or moving parts. Ideally, the first generation of products will also contain less than 10 lines on the bill of material and be oriented around a finite number of SKUs. Once a product can be made effectively and at the right price point, SKU proliferation will follow.

4) Scale of Demand – HermitCrab will attempt to open facilities under a proof-of-concept model that will allow the process to be perfected before scaling to full production of particular product categories. In other words, once a product line is selected, Hermitcrab will work with our clients to produce a subset of a product line and/or produce products for a specific geography. Once product specifications and quality standards have been met, HermitCrab will work with our clients to fully reshore that particular product to satisfy the North American Market needs.

5) Low Labor Content – Even though the labor cost gap has closed considerably over the last 10 to 15 years, it is important to focus on products that have low touch and or low labor content to produce. There is an ocean of products that do not require a high degree of Labor content, and can benefit from the introduction of automation and industry 4.0 technologies that did not exist when the products were offshored in the first place.