A recent opinion piece published in the New York Times carried the headline: “The Era of Offshoring U.S. Jobs Is Over.” The author was Robert Lighthizer, the U.S. trade representative. Fans of the Made-in-USA movement might have stood and cheered at some of the points he was making.
“In recent years,” he wrote, “businesses have been rethinking the way that overseas supply lines expose them to unacceptable risk,” he wrote. Those risks often outweigh the efficiencies, he added.
Lighthizer was armed with stats supporting his case, specifically the Kearney Reshoring Index, which measures the global production strategies of companies in the U.S. It shifted significantly in 2019, he said, reversing a five-year trend. Imports of manufactured products from “low-wage Asian countries” declined, while U.S. domestic manufacturing output remained strong.
The COVID-19 pandemic has magnified these trends and bolstered the case for domestic manufacturing. It has “revealed our over-reliance on other countries” for important products, he said, including all the personal protective equipment that’s flying off the shelves of “essential retailers.”
In the healthcare field, some 80% of all PPE are sourced from Southeast Asia, according to healthcare improvement company Premier Inc. That company is one of many working to change those numbers. “One of the major lessons of the COVID-19 pandemic is that the current U.S. supply chain overleverages foreign markets for many vital medical products, which can inhibit our ability to manage through a pandemic or another natural disaster,” said Premier President Michael J. Alkire.
Like the U.S. Trade Representative, many manufacturers in the hardware and building supply sector believe the pandemic will accelerate interest in domestic manufacturing. An HBSDealer special report on the Made in USA movement appears in the June issue, with contributions from sixty companies that embrace domestic manufacturing.
Several voiced the opinion that the domestic manufacturing has the ability to rise to the challenges of a pandemic.
”This COVID-19 situation has taught us that having domestically sourced products is important and vital to supply chain success stories and we take pride in still being able to ship on time, in full, to our distributors, retailers and other partners,” according to the submission from AccuSharp Knife and Tool Sharpeners, based in Texas.
At Saddle Brook, N.J.-based Arrow Fastener Co., the pandemic-induced disruptions are seen as an opportunity to improve operations. “We are working at increasing capacity through automation to better meet seasonal spikes and unanticipated surges in demand (COVID 19, hurricanes, and other unanticipated events),” the company wrote. “Additionally, we are upgrading our forecasting and data analytics platforms to better anticipate shifts in demand along with exploring the manufacture of other product segments in our current facility.”
Despite the benefits of domestic manufacturing, several companies pointed out that off-shoring is not going to simply disappear.
“There will always be a trade-off between cost to source and cost to supply security for products that can be produced off-shore,” submitted Texas-based F-Wave, maker of synthetic shingles. “Wholesalers and retailers must provide supply security. To us, this means factoring in the cost of buffer stocks and disruption to their customers when making supply chain decisions.”
Wallboard Tool Co. says that it can continue to make tools when the supply chain is interrupted. It imports some tools, but makes more than 85% of its tools in Long Beach, Calif.
“When retailers only focus on price rather than quality, the imports always win,” the company said. “U.S. manufactures cannot compete with low wages paid to workers in China. The supply chain can only improve when the U.S. consumer is willing to support brands that are made in the USA. Many U.S. brands now have all of their production made in foreign countries. We must bring back manufacturing to the USA to support the American work force and protect the American supply chain.”
L.E. Johnson of Elkhart, Ind., makers of innovative door hardware, explained it this way: “We, as a nation and as an industry, have always been innovators. And we’ll build a way to come out of this pandemic stronger, smarter, and safer.”