Reshoring Initiative: Cost to Bring Back Manufacturing

February 03, 2014 at 5:13 AM

For Harry Moser, the return of manufacturing to the United States is a very personal one that began as a boy growing up in Elizabeth, New Jersey. His father and his grandfather were employed in management roles at the once prospering Singer Sewing Machine Company factory in Elizabeth. Moser himself worked at the plant during high school and college summer vacations. And then it was gone. Singer, like many U.S. manufacturing plants, moved their operations offshore, taking along with the factory those solid manufacturing jobs.

These bittersweet memories helped trigger Moser to start the Chicago based non-profit Reshoring Initiative in 2010. The Reshoring Initiative is an industry-led effort to bring manufacturing and related jobs back to the United States. Moser’s organization works to prove to U.S. manufacturers that local production and sourcing often reduce their total cost of ownership of purchased parts and tooling, making the decision to manufacture in the U.S. an economic one. This is a process based in economics, not cheerleading. Yet, Moser’s patriotism shows through in his enthusiastic attitude towards manufacturing.

The MIT-educated Moser is no stranger to industry. After getting a taste of manufacturing at the Singer plant, Moser spent the next 45 years gaining manufacturing experience that included extensive time in the machine tool industry. He was inducted into the 2010 Industry Week Manufacturing Hall of Fame and Quality Magazine named him as the 2012 Quality Professional of the Year. During that same year, he participated in President Obama’s 2012 Insourcing Forum and testified at a Congressional hearing on reshoring and manufacturing.

Working back through the domestic supply chain, the Reshoring Initiative also trains suppliers to demonstrate to manufacturers the economic advantages of local sourcing. According to Moser, “We will continue our ‘return-manufacturing-home’ message until all U.S. manufacturers are making objective sourcing decisions and thus realize America is increasingly the place to produce and source goods to supply the U.S. market.”

What makes Moser unique is the measured and balanced approach he is taking to his cause to repatriate manufacturing. “I think many companies did not do a proper cost analysis when they decided to move manufacturing offshore or eliminate manufacturing all together,” says Moser. “If they did, they can’t help but notice that the total cost of offshore manufacturing is not as good as they think it is.” He notes that not only do opportunity costs favor U.S manufacturing, but also there is evidence that domestic consumers prefer to buy an American-made product.

Moser notes that the manufacturing climate in the U.S. is changing, especially around productivity. While some companies have made the news recently by moving manufacturing operations to the United States, increasing productivity in on the factory floor calls for fewer jobs to support manufacturing output. He wants to make up for these productivity-related job losses by bringing jobs back to the U.S.

Moser has developed a series of economic development program proposals to bolster his reshoring efforts. Those include a data-driven process to analyze local production using a total cost of ownership model, expanding and promoting a skilled workforce to manufacturers who want to expand or relocate their operations, and ways to improve the perception of manufacturing as a path to middle income careers. “I want to terminate the use of the words ‘vocation’ and ‘trades’ and refer to the skilled manufacturing occupations as ‘professions’ and the workers as ‘professionals’,” says Moser. “This is they way they do it in Germany and Switzerland.”

When asked how he would define future success, Moser says simply that U.S. manufacturing output would be more than it is today. “The move to offshoring began 60 years ago and we can’t think it will all come back in a year’s time,” says Moser. “I am a realist.”

See the other articles in this My Purchasing Center series: Fabricator Bucks Offshore Headwinds, Hyundai Motors Manufactures in America, The Economics of a Manufacturing Renaissance and Energy Prices, Wages Give U.S. Manufacturers Edge

Also see Rich’s blog at My Purchasing Center: Back in the U.S.A.