Nearshore Manufacturing: Your Questions Answered
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You’ve got questions about moving your manufacturing operations from overseas to a nearby location. You are looking at how to best relocate and reconfigure your supply chain in order to reduce costs and improve quality.
But where do you find answers?
First off, you’re not alone. According to a recent study from automation provider ABB, 70% of U.S. businesses are planning to nearshore operations to build their supply chain resilience. But it’s not just picking up and moving operations closer to home. This move in manufacturing presents real questions related to:
- Manufactured parts quality
- Building a resilient supply chain
- Finding and retaining skilled labor
We engaged two members of our Ryerson Advanced Processing team, General Manager James Porter and Supply Chain Director Tim Driver to tackle these questions and more.
1. How Long Will It Take to Nearshore My Manufacturing Operations?
First things, first: when it comes to nearshoring, you need to ensure it can be done promptly and with as little disruption as possible. For many, the hardest part may be that dynamic transfer from an existing durable supply chain to one with an unknown set of suppliers and vendors. But you don’t need to go at it alone. Porter and Driver discuss a typical timeframe for nearshoring and the value of a qualified partner network in streamlining that process.
How Do I Ensure Manufactured Parts Quality?
As supply chains shift and reshoring efforts are put into place, you need assurance that the produced parts meet your quality expectations.
In his role, Driver talks with numerous manufacturers and fabrication shops nationwide. What they are saying is that the cost-benefit of outsourcing no longer outweighs the occasional quality issue with parts.
“The past two and a half years have really shown quite a disruption in the methodology for outsourcing, especially to areas like Asia. In the past, the decision to outsource was based primarily on cost, and if you had a quality problem, you still came out ahead because the total landed cost was still lower than the material cost.”
But that is no longer the case as Driver explains in this clip:
How Do I Find and Retain Skilled Manufacturing Labor?
Over the past 12 months, the U.S. manufacturing industry has added nearly 500,000 jobs, equating to the largest workforce in this industry since the Great Recession. Despite this fact, the labor gap remains wide, given the roughly 800,000 job openings that remain in this industry, according to the U.S. Labor Department.
So, it begs the question: How do you effectively bring production closer to home when you struggle to fill the headcount inside your four walls? In a word, that answer, says Porter, is automation.
The ABB study found that 70% of U.S. businesses have planned reshoring efforts. Roughly 62% of these businesses plan to invest in automation in the next three-to-five years to help facilitate this shift in operations.
Despite the appetite for automation, the survey found a significant gap in the education and training needed to ensure the skills necessary for work in the increasingly connected and automated workplaces of the future.
Porter addresses how Ryerson’s investments in automation are helping close the labor gap.
Are you ready to discuss how Ryerson can become your nearshoring manufacturing solution? Whether it is a high-volume single location, a multiple location solution, or the need for just-in-time production, Ryerson Advanced Processing can orchestrate the most optimal supply chain.
Let's talk about a nearshoring plan for your business