A Conversation With ... Harry Moser, Reshoring Initiative

 

HM: The Reshoring Initiative documents for manufacturers the benefits of sourcing in the United States. Archstone Consulting’s 2009 survey showed that 60 percent of manufacturers use “rudimentary total cost models” and ignore 20 percent of the cost of offshoring. To help manufacturers make better sourcing decisions, the Reshoring Initiative provides free “Total Cost of Ownership” software on our website that helps manufacturers calculate the real offshoring impact on their P&L.

 

HM: Reshoring breaks out from the “waiting-for-policy-decisions” problem of government efforts, the economic zero-sum game of tax or borrow and spend, and the increases in consumer prices from relying solely on currency adjustment. Reshoring takes jobs directly back from offshore, often from “low-labor-cost countries” that have grown so rapidly over the last decades at the expense of American workers, American manufacturing companies and the overall U.S. economy. Reshoring also focuses on the manufacturing sector, which has suffered so many job losses for decades, and the SMEs, which offer the best potential for job growth.

 

HM: In 2011, the Initiative will progress from Phase 1, which is broad communication and dissemination of the concept and tools, to Phase 2, which will be regionally focused reshoring events that result in a measured number of jobs actually brought back. Illinois and Ohio are currently the most advanced in Phase 2. There is also interest in Arizona, Connecticut, Massachusetts, Maryland, Michigan and South Carolina. We expect the cost per “permanent” manufacturing job to be 1 percent of the cost of a one-year Stimulus Program government job.

 

HM: A January 2010 Grant Thornton survey concluded that 51 percent of companies that offshored found no financial advantage and 20 percent brought work closer to home in 2009. The lack of financial advantage was likely due to an initial fascination with lower labor cost and a failure to project offshoring’s total impact on revenue, overhead costs and the balance sheet. Companies deciding on site locations will benefit by calculating the “Total Cost of Ownership” of parts and tools for each site considered. Reshoring also positively impacts other factors of importance in site selection, including quality of life and supply-chain environmental footprint.

 

HM: My grandfather and father worked their entire careers at Singer Sewing Machine at the Elizabeth, N.J., factory. It was during the time when the U.S. dominated the field. Once the envy of the world, the Singer plant is now long gone, and I don’t want to see more U.S. manufacturing disappear.