April 19, 2020

Harry Moser on the COVID-19 Supply Chain Wake-Up Call, Reshoring, and Lean

http://www.leanblog.org/366 

My guest for Episode #366 is Harry Moser, founder of the Reshoring Initiative. We talk about “reshoring,” in general, and why that's such an important issue in the context of the Covid-19 pandemic and beyond.

Harry definitely falls into the category of guests where I wonder, “Why haven't I had this person on the show before?” Harry and his work have been on my radar for a long time. I appreciate the mission and I wish more companies would consider the “Total Cost” (and old Dr. Deming concept) when making manufacturing site location and sourcing decisions instead of focusing only on “unit cost” or “landed cost” (which includes freight and taxes).

“The mission of the Reshoring Initiative® is to bring good, well-paying manufacturing jobs back to the United States by assisting companies to more accurately assess their total cost of offshoring, and shift collective thinking from offshoring is cheaper to local reduces the total cost of ownership. “

Harry was inducted into the Industry Week Manufacturing Hall of Fame in 2010, based on his long career in manufacturing. He founded the Reshoring Initiative in 2010. Be sure to check out the TCO Estimator tool that he discusses in the episode.

“Most companies make sourcing decisions based solely on price, oftentimes resulting in a 20 to 30 percent miscalculation of actual offshoring costs.”

  • Listeners have probably heard of “offshoring” but what is “reshoring”?

    • Why “reshoring”?
    • What is “nearshoring” and is that nearly as good?
  • Tell us about the history of your organization, the Reshoring Initiative…
  • Why should our current Covid-19 crisis be a “wake up call” about where goods are manufactured?
  • Do you think it's fair when analysts or the media blame “just in time” for shortages of goods and equipment during this crisis (in healthcare or retail)? Why or why not?
  • Can Lean take out enough waste to make a high-labor manufacturing site competitive with U.S. wages?
  • Dan Markovitz question (paraphrasing): Is moving production back to the US easier said than done if we don't have the skills or the supply base here anymore?
  • How can we help companies (and investors) realize that “lowest total cost” is the goal, not “lowest labor cost” or “lowest piece price cost”?

    • Why have companies miscalculated when doing the math about moving production to China?
  • How can companies use TCO to increase sales?
  • Can you give some past examples of reshoring and the benefits?
  • What can/should the government do to accelerate the reshoring trend?

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