Onshoring Project Consortium Promotes Strategic Supply Management Practices

Photo Credit: AMT

In the wake of ongoing global supply chain disruptions, a consortium of North American innovators, practitioners, and supply chain experts from across the manufacturing industry have launched a new endeavor with the express intent to reverse the five-decade trend toward offshoring. The Onshoring Project will develop and share new metrics, new tools, and practices that will shift executive focus from piece-price calculations, which have led to disastrous effects, toward the sounder and more financially beneficial strategy of sourcing from lean-performing North American suppliers.

“The Onshoring Project’s mission is to facilitate a shift in OEM executive behavior when they select and evaluate supply chain partners,” says Douglas K. Woods, president, AMT – The Association For Manufacturing Technology. “Through sharing best practices, documented case studies, and supply management techniques, the Onshoring Project will prove the positive business impacts of working with lean and agile suppliers. As a result, we can strengthen and grow our domestic manufacturing base, especially among small and medium-sized companies.”

Current members are like-minded associations and companies whose own interests align with the organization’s vision. Initial members include AMT, IndustryWeek, American Industrial Acquisition Corporation (AIAC), Helpful Engineering, the Reshoring Initiative, and Gardner Business Media. These organizations have signed the Onshoring Project’s memorandum of understanding (MOU) that outlines the goals of the consortium. Any organizations interested in joining the Onshoring Project should contact them through the website, www.theonshoringproject.com.

“The Onshoring Project will help members present lean supply chain strategies in terms that grab the attention of the C-suite,” says Paul Ericksen, IndustryWeek supply chain advisor and author of “Better Business: Breaking Down the Walls of the Purchasing Silo.”

Better customer fill rate, lower finished goods on hand, less work in process and inventory in transit, reduced inspection, lower safety stock, lower risk, innovation at a faster pace, and shorter lead times are the enablement goals of the Onshoring Project.

“Companies with lean supply chains are less reliant on long-term demand forecasts,” says Woods. “They can capture more incremental sales by reacting faster to market demand and grow faster and more profitably.”

A Pivotal Point

“We have arrived at a pivotal moment as we emerge from the COVID-19 crisis and the associated supply chain disruptions,” says Ben Treuhaft, president and CEO, Helpful Engineering. “After decades of stalled North American manufacturing progress, we have an opportunity to unlock value through the Onshoring Project, where we see the potential for new business models, mutually beneficial ways of businesses interacting with each other, and the potential for new technologies providing value – not just for Onshoring Project participants, but North American manufacturing at large.”

COVID-19 highlighted problems with overextended and inefficient offshore supply chains. The Onshoring Project intends to provide participants with a new playbook to create robust supply chains and better profitability.

“The consortium is important for any manufacturing organization that needs support, advice, benchmarking, and new sourcing methods – methods that reliably anchor their supply chains to metrics beyond price,” says Vic Venettozzi, vice president and general manager, Consolidated Industries Inc., an AIAC company. “The Onshoring Project is a one-stop shop that provides participants the toolkit they need to survive disruptions and emerge from a crisis faster.”

A Growing Initiative

“The Reshoring Initiative is delighted with the growth of 25-times the annual onshoring manufacturing jobs announced from 2010 to 2020,” says Harry Moser, founder and president, Reshoring Initiative. “We anticipate that the added strength of the Onshoring Project team will double the rate of jobs being onshored, create new domestic jobs, and start reducing the trade deficit.”

U.S. manufacturing has stabilized since 2010, with manufacturing employment up by over 600,000, despite the 2020 recession. The rate of manufacturing onshoring has increased from 6,000 jobs per year in 2010 to a peak of 190,000 in 2017. However, offshoring has continued, and the trade deficit has grown. If all companies included total cost of ownership (TCO) and manufacturing critical-path time (MCT) in their sourcing and plant-siting decisions, U.S. manufacturing would increase by about 20%, or more than 2 million jobs.

“COVID-19 was a wake-up call for OEMs,” says Woods. “The Onshoring Project will provide the incentive and guidance to show purchasing agents that lean supply chains are a healthier, more sustainable alternative.”