Reshoring Goes Viral

POSTED ON 4/9/2020 – The COVID-19 pandemic has revealed many heroes among our neighbors, from the doctors and nurses fighting on the front lines to the grocery store and sanitation workers keeping the world running. Manufacturing, both in the medical industry and beyond, has its role to play as well, and heroes throughout the industry have been doing their part. But as the Reshoring Initiative’s Harry Moser pointed out in a recent episode of Mazak’s All Axes podcast, the crisis is also revealing the limitations of a global supply chain – and pointing toward how to fix it with advanced domestic manufacturing.

In normal times, the fragility of the supply chain isn’t an issue for many Americans. It may be true that 97% of antibiotics are imported, for example, but as long as shelves stay stocked, the distance the pills traveled to the pharmacy isn’t important for most customers. But this system only works when supply and demand remain stable; during periods of abnormally high demand, the global supply chain can’t keep up. And when the U.S. is producing only 1.66 million surgical masks per day to China’s 115 million, that’s an issue, especially when the Department of Health and Human Services estimates that pandemic conditions may require as many as 3.5 billion masks in the U.S. alone.

Increasing domestic production capacity isn’t just a matter of national security, however. In fact, many shops are using the present crisis to reconsider how much of a negative impact offshoring has on their profitability. Few manufacturers study the topic closely – about 60% of companies only look at the sticker price for production. And by doing so, they miss roughly 20% of the total cost of offshoring, from travel costs to the risks to intellectual property.

Read More