The United States economy needs manufacturing facilities, ports, trucking routes, trains, and supply lines to be humming again. Manufacturing is the foundation of the U.S. economy and our country’s large middle class.
For decades, companies have been shifting production offshore, negatively impacting domestic manufacturing capabilities, jobs and the environment through higher carbon emissions and other pollution from China and other developing countries. The disruption from the COVID-19 pandemic has exposed America’s overdependence on imports and underscored the need to bring those suppliers and capabilities closer to home.
In the words of Harvard Business School Professor Willy Shih, “Nobody could have foreseen what would happen when the world’s second-largest economy went offline and completely shut down external logistics connections.” Shih recommends that companies embrace “regionalization,” use more suppliers in the same region for their final manufacture and seek second sources and safety stocks for products and components. Shih adds, “Supply concentration has been the result of companies focusing narrowly on price at the expense of supplier diversity.” “At a given level of demand there are only two ways to rebuild manufacturing: export more or import less. Importing less, reshoring, is much the easier to achieve,” states Harry Moser, Founder & President of the Reshoring Initiative®.
The Made in America 2030 industrial strategy must target complete supply chains, with reasonable judgments about what parts of the supply chain need to be produced in the US and what parts can be left to trusted partners. The new United States-Mexico-Canada Agreement (USMCA), which went into effect on July 1, represents a banner day for American trade and American workers, as a new era begins with America’s two biggest trade partners, Mexico, and Canada.
A Made in America 2030 program can boost the economy and address many of the long-term economic and national security weaknesses. Congress should consider a $5 trillion, ten-year program, divided equally between rebuilding aging US infrastructure and an industrial strategy to rebuild vital American industrial capabilities. It would create more than three million jobs and boost GDP by some $500 billion a year in the early years, rising higher over time as the reshored industries ramp up production.
American manufacturers are turning to organizations like Made in America, whose goal is to inspire people to innovate, build, and buy American Made. They hold a national celebration supporting a Made in the USA movement by bringing hundreds of manufacturers from across the country together to showcase high-quality, U.S. made machines and products. Don Buckner, Sr. Chairman & CEO believes, “Our role is to stimulate patriotic spending, by educating the consumer about the importance of spending their American dollars on American made products to keep American jobs in America. A strong America equals a strong world economy.”
Michele Nash-Hoff, author of “Rebuild Manufacturing – the key to American prosperity” wrote, “We cannot risk being held hostage to foreign manufacturers when it comes to products that are essential for our national security and the U.S. military, and we must source critical pharmaceuticals, PPE, and medical devices in the U.S. to protect the health and safety of American citizens so we can weather future unforeseen crises. This is the only way that we will be able to protect our national security and remain a free country.”
A Manufacturing Marshall Plan
As we see it, we need to initiate a new style manufacturing “Marshall Plan” for the revitalization of a post-pandemic economy. To protect against future disruptions and shortages, we must rebuild home-based supply chains capable of producing critical items and sectors as we did for Europe after World War II. This new plan, a commitment to the American industrial base, that is frankly overdue, must:
- Advocate for reshoring, nearshoring and LeanShoring™
- Increase our focus on Industry 4.0 innovations
- Enhance educational and training offerings to create a stronger workforce
To accomplish this transformation, businesses are now rethinking offshoring decisions in favor of reshoring or nearshoring. Companies are adopting LeanShoring™ practices to reduce domestic manufacturing costs by eliminating waste in their current processes, i.e. anything that does not provide value to the end customer. At the same time, they are driving an enterprise wide continuous improvement process to incrementally improve production processes while eliminating risk.
American manufacturers need to accelerate the deployment of “Lean manufacturing” best practices to increase the productivity of American workers and competitively build and sell more products at home. Thus, making the “Made in America” and the “America Dream” a reality, again!
Together We Can Do It!
Glenn Marshall, Newport News Shipbuilding Career Pathways (retired), is on the Association for Manufacturing Excellence (AME) Management Team initiative for leading a “Manufacturing Renaissance” and a member of the Reshoring Initiative and Job Creators Network. For more information contact [email protected].