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Episode 6 - Supply Chain Opportunities: Reshoring, Restructuring, and Nearshoring

Posted by Rachel Miller

 

Episode Show Notes

In this episode, Gregg is joined by Harry Moser, Founder of the Reshoring Initiative. They discuss how companies are rethinking their supply chain strategies in light of the disruptions caused by the COVID-19 pandemic to mitigate risks and better position themselves to be ready for future challenges. 

Harry Moser founded the Reshoring Initiative in 2010 to bring manufacturing jobs back to the U.S. Prior to starting the Initiative, he held leadership positions at GF Machining Solutions, formerly known as GF AgieCharmilles, where he began in 1985 as the company’s president and retired in 2010 as Chairman Emeritus. 

Moser’s reshoring efforts have been widely recognized. In 2010, he was inducted into the Industry Week Manufacturing Hall of Fame and was named Quality Magazine’s Quality Professional of the year in 2012. Moser actively participated in President Obama’s Insourcing Forum at the White House in January 2012. He also won The Economist debate in January 2013 on outsourcing and offshoring and received the Manufacturing Leadership Council’s Industry Advocacy Award in 2014.

Highlights

00:00:00 – Motivation for starting the Reshoring Initiative and reasons manufacturers should be interested in it today

00:02:04 - State of manufacturer supply chains in the US, particularly in California

00:03:39 - Definition of reshoring

00:05:01 - Current trends related to reshoring

00:07:39 - Common challenges to reshoring

00:10:22 - Hidden costs

00:12:57 - Best practices

00:16:32 - Possible pitfalls

00:18:11 - Discussion about automation

00:19:19 - Different approaches to reshoring

00:21:15 - Pros and cons

00:23:20 - Getting the maximum benefit from reshoring efforts

00:24:21 - Marketing strategies

00:26:35 - How the Reshoring Initiative can help companies achieve benefits

Transcript

Gregg Profozich [00:00:02] In the world of manufacturing, change is the only constant. How are small and medium-sized manufacturers, SMMs, to keep up with new technologies, regulations, and other important shifts, let alone leverage them to become leaders in their industries? Shifting Gears, a podcast from CMTC, highlights leaders in the modern world of manufacturing, from SMMs, to consultants, to industry experts. Each quarter we go deep into topics pertinent to both operating a manufacturing firm and the industry as a whole. Join us to hear about manufacturing sectors' latest trends, groundbreaking technologies, and expert insights to help SMMs in California set themselves apart in this exciting modern world of innovation and change. I'm Gregg Profozich, Director of Advanced Manufacturing Technologies at CMTC. I'd like to welcome you. In this episode our topic is reshoring. I'm joined by Harry Moser, Founder of the Reshoring Initiative. We discuss how companies are rethinking their supply chain strategies in light of the disruptions caused by the COVID-19 pandemic to mitigate risks and better position themselves to be ready for future challenges. Welcome. It's great to have you here. The pandemic has had the world's attention since early 2020, but you founded the Reshoring Initiative back in 2010. I assume that there's a number of opportunities that got you started in reshoring. What are they, and why should manufacturers be interested today?

Harry Moser [00:01:25] My motivation for starting the initiative was my background. I grew up in Elizabeth, New Jersey, right across the river from New York. Biggest thing in town was Singer sewing machine, the largest factory in the world 100 years ago. My family worked there; my father, my grandfather; managers there. I went past 20 years ago. Everything is gone. Nothing is made in the United States. The companies that I sold machine tools to during my career, huge numbers of them went out of business. They were just devastated by imports. So, I saw that was happening, saw it had happened. I decided that too many jobs had been lost across the country and in California and that something had to be done.

Gregg Profozich [00:02:04] Harry, talk to us a little bit about the state of manufacturer supply chains across the US and then particularly those in California.

Harry Moser [00:02:12] US has been devastated. The supply chains have been devastated by that decline that I described. In the last 20 years the US lost about 91,000 manufacturing companies, California probably 5,000 or 10,000, something like that; 6 million workers, the backbone of the middle class. As those companies disappeared, the supply chain shrunk. Eventually we had supply chain gaps, products that are no longer made in the US that you can only find in China or in Southeast Asia. So, inside the US, the supply chain has been hurt by those gaps, by weak skilled workforce recruitment. The smart high school kids getting out looked around and said, "What should I go into? Well, not manufacturing. They've lost this job. Why would I want to go into that?" So, regulations have made things difficult. So, these things have piled up and made the US supply chain difficult. At the same time, the offshore supply chain has had problems. We've had rapidly rising wages and prices in China, for example; intellectual property loss; very complex supply chains, very hard to manage. But lack of control of how products are made. You send the product over. Somebody's making them for you. All of a sudden, the material and the design changes. Too much inventory. We had a case of a company that they reshored, and they cut inventory by 94 percent. A variety of problems like that have made both the domestic supply chain more problematic and the offshore more difficult and expensive.

Gregg Profozich [00:03:39] Sounds like there's a lot of complexity there, Harry. We should probably try to make things a little simpler. So, reshoring, nearshoring, offshoring, onshoring. There are a number of terms floating around out there. To get everyone on the same page, let's spend a few minutes on defining reshoring. What exactly is it from your perspective?

Harry Moser [00:03:55] We consider reshoring and onshoring to be the same thing, the production or sourcing in the US of products previously sourced offshore, and only really thinking about products that will be eventually consumed or assembled here. So, if GM goes and builds a factory in China and makes cars for the Chinese, we don't think of that as offshoring; that's just good business. But if they make the cars there and ship them back to the US, then that was offshored. If they change their mind and start producing that model again in the US, then they've reshored that model. We also look at FDI, foreign direct investment. So, for example, when Toyota builds a factory in the US, that's foreign direct investment. Just like with reshoring, the company has decided it'll be more profitable producing in the US for the US instead of producing somewhere else and shipping to the US. So, most of the decisions on this are made by the OEMs, the big companies, but much of the production is done by the SMEs, the clients the companies with which the MEPs typically work.

Gregg Profozich [00:05:01] Absolutely. MEP stands for manufacturing extension partnership. We're mission-based organizations across the nation chartered with helping small and mid-sized manufacturers increase their productivity and global competitiveness. We work across all of the different tiers of those supply chains on those smaller manufacturers — the fastener manufacturers, the wiring harness manufacturers, etc., — all those who build individual parts and components that feed into those larger OEM supply chains. So, let's talk about some of the trends among US manufacturing firms in the past few years related to reshoring. Has it become more popular? If so, why?

Harry Moser [00:05:34] Yeah, unquestionably more popular. When we started in 2010, in that year the total number of jobs announced to come back, a combination of reshoring by US companies and FDI by foreign companies was 6,000 and by 2017, in that year 190,000. So, more than 30 times. Could continuously increase but driven especially in 2017 by the corporate tax rate reductions and regulatory reductions, generally a more business-friendly climate. So, it zoomed up 50 percent, 60 percent in 2017, and then in 2018 and 2019 it came down. It's still at good levels — 150,000, 120,000 — but hurt by the trade war. Companies had business uncertainty. They said, "I don't know what the tariffs are going to be on what product from what countries for how long," and they said, "I'll wait until this plays out, and then we'll make our decisions." So, we believe that now that things seem to be playing out that they'll get back to it, and we'll be back up to that 190,000, 200,000 jobs a year range.

Gregg Profozich [00:06:44] So, it's a very dynamic thing. Companies continuously making re-evaluations of investment decisions: what's the best thing to do; what's the tax structure; what's the regulatory environment, etc.?

Harry Moser [00:06:53] Yeah. The one thing... Just the implication of what you said with investment decisions suggests their own factory, and very important in this is the outsourcing element. Most of the work — for example, this done in China for the United States market — has been outsourced by US companies to Chinese contract manufacturers of some kind. Think Foxconn, for example. So, there is not significant investment by the US company in that production, and there doesn't have to be in the US when the work comes back. They just have to go out and find a good contract manufacturer — for example, one of your clients — and get them to be competitive enough to bring the work back, especially when they think about things like total cost instead of just price.

Gregg Profozich [00:07:39] So, at a high level, as with most things, the concept sounds pretty simple  —  relocate factories or find domestic suppliers. But the devil is often in the details, as we all know. What are the common challenges that manufacturers face once they have made the decision to reshore?

Harry Moser [00:07:54] Shortages of skilled workforce. We all know that year after year, decades, the US has not had enough toolmakers, welders, precision machinists. It hasn't been the chosen career for an awful lot of the smart high school students, and, therefore, we don't do as well with that as, say, the Germans, the Swiss, and increasingly, the Chinese. So, a skilled workforce is important. There's a one-time cost of moving. Even if you have outsourced the work offshore, you've got an injection mold there, and you'd like to bring it back and run it here, or have someone run it here, but the Chinese probably will not let you take it. So, there's a cost of perhaps retooling. You have to in some cases move people, tooling, and technology. When you pull out of a supplier relationship, say, in China especially, you potentially have created a competitor, because they keep the intellectual property and might start making your product and selling it. There's issues of planning and market surprises. Otis Elevator had been producing in, I think, Mexico, and they moved to the Carolinas, I think. When they did that, it was just the time when their market picked up. They didn't have enough inventory to meet the demand, and they had problems finding enough skilled workforce. So, for a year or two they were really behind the ball, because of the combination of not enough planning and not enough inventory to deal with what might happen. Supply chain gaps here. You may have heard the stories in the past with Steve Jobs or Tim Cook. They asked, "Why don't you make the smartphones here?" and they say, "Well, for one reason, because the components aren't made here. So, therefore, we go where the components are, and we assemble the product where we can get most of the components." Also, companies put a factory in offshore if to the extent that they put their own factory in, not just to ship cheap things back to the US but to sell in that foreign market. So, if they pull out, literally pull out and come back to the US, then they are perhaps dropping out of that market, and they certainly will not be able to produce the product cheap enough here to ship it to China. So, there are all kinds of complications. So, it's not simple, simple. They went over thinking it was simple-looking, perhaps, just at the wage rate or just at the ex works price or FOB price, but we encourage them not to do it simply but to do the math, do the calculation, do the planning. If they do that, they'll still find that maybe 20 percent, 30 percent of what they now import will be more profitably done here.

Gregg Profozich [00:10:22] So, it sounds like there are a lot of total cost elements that you're talking about and touching on as you go through that, not just FOB costs or labor costs, but some of the other hidden costs. Can we talk a little bit about what some of those are and some of the things that we would consider in trying to make a reshoring decision?

Harry Moser [00:10:35] Duty  —  standard 3 percent, 4 percent or 5 percent duties, freight. Freight costs are up dramatically due to the airplanes, not as many airplanes coming over that would be carrying freight due to changes in environmental rules for bunker fuel for the ships. So, freight costs have gone up. So, duty, freight, carrying cost of inventory. I mentioned that case of the inventory coming down by 94 percent. A lot of companies will assume that inventory costs them 20 percent to 25 percent a year. Obsolescence, dollars tied up in the inventory, counting it, auditing it, protecting it, all this kind of thing. That's a lot of money. Travel costs to go check on the supplier. If you have your engineering in the US, and you have your factory somewhere else, it's very difficult for the two to work together to optimize the product and the process. Professors Pizano and Chi at Harvard Business School have repeatedly studied this and said there's huge advantage to having engineering and manufacturing close to each other.

Gregg Profozich [00:11:35] Along with the innovation benefits that happen when the designers and the manufacturers can look at a problem and say, "Hey, there's a unique way we could do this, and it benefits the customer and our process," right? 

Harry Moser [00:11:45] Exactly.

Gregg Profozich [00:11:45] Having them in the same room has huge benefits.

Harry Moser [00:11:47] The risk of stocking out. If you have a six-week delivery time from China, or India, or somewhere like that, and all of a sudden there's a surge, you're going to lose some orders, because you can't deliver. You may lose customers, whereas if your supplier is 100, 500 miles away in the US and they can get you something in a couple of days, because they don't have to wait to fill a container, and put it on a boat, get it through the port, your chances of success go up dramatically. Increasingly, the consumer prefers a Made in USA product. Especially since the COVID crisis, the percentage of people that say they prefer Made in USA is up substantially. The percentage that say they'll pay, say, 10 percent more, maybe it's 37 percent of people now. So, if you're assembling something already here, and it's not made in USA, especially with California's tough Made in USA compliance requirements, if you can get those last couple of parts made in USA, even if they cost twice as much, but they're only a small percentage of the total, and you can sell the product for 5 percent, 10 percent more, should be substantially more profitable.

Gregg Profozich [00:12:57] A lot of things to consider there, Harry. Thank you for sharing those. I think across your time at the Reshoring Initiative you've probably developed a set of best practices on what to look at for reshoring. Could you share some of those with our listeners?

Harry Moser [00:13:07] Sure. As we've been talking about, it is the total cost of ownership and against the difference between what's the price that the factory is charging me versus what is the total cost when you get all in. As an example of the impact of this, I took the first 180 cases of China versus the US, where companies had gone in, used our software, and done the calculation, and said they were doing a real case, not just playing. In those cases on average, the Chinese price is 70 percent of the US price. So, dramatically lower. You can understand why companies go over there to get parts made. But when you look at total costs, that shifts. So, the average now is 85 percent or so. When you're looking only at price, in about 8 percent of the cases the US had a lower price. But looking at total costs, in about 32 percent of the cases the US had the lowest total costs. If there happened to be a 15 percent tariff, then the US would win 46 percent of the time. So, just by doing the math correctly, just by getting the company to quantify all the relevant factors, all of a sudden the win rate goes from, like I say, 8 percent to 46 percent. So, we summarize that by saying 20 percent to 30 percent of what's now imported would come back just if we can get the OEM to do the math correctly. So, one of the things that we suggest is for your clients, for the SME companies, to use the TCO estimator as a sales tool to convince those big companies to do the math correctly and improve their profitability by bringing the work back.

Gregg Profozich [00:14:43] Sounds like a powerful analytical tool.

Harry Moser [00:14:45] Well, it is. It has been very successful. You asked about some other best practices. So, I'll add those in, too. We talk a lot about leanshoring. So, I live most of the time, or half the time, up in Maine. My neighbor up there is Jim Womack, who's one of the leading lights of the lean movement. He talks about leanshoring, and he says you can't bring the work back into the factory that you took it out of 20 years ago and put it on the same machines with the same workers with no more training, because if you do, someone will come along smart and send it back to China again, because that won't work. So, when you bring it back, you have to bring it back lean; you have to apply lean flow processes; you have to automate; you have to train the workforce; you have to engage the workforce; you have to bring in your MEP to help you do those things so you can optimize. So, we see a nice combination of these things. Let's say there's a 30 percent price difference, FOB price difference, between the US and China, and we apply TCO, and now there's, say, a 7 percent PCO difference. Well, that's the time for CMTC to come in and help get 10 percent out of the manufacturing cost, automation, skills, lean, things like that, whereas if the client company called you up and said, "Can you get 35 percent or 40 percent out of our total manufacturing cost?" that's not very likely. But can you get seven? So, by doing TCO first, all of a sudden, the ROI on automation, on training, on lean just went up dramatically.

Gregg Profozich [00:16:14] It's a very sensible nuts-and-bolts way to break it down. I think it will resonate with a lot of people, because lean can have those incremental small improvements. So, what you're telling me is I need a 1 percent improvement a month for the next 12 months, and suddenly I'm in the positive and continuing to climb. That's not something that's out of reach.

Harry Moser [00:16:32] A couple of things that I skipped over that I wanted to make clear, a couple other problems that companies have when they reshore. One is a lot of what's offshored and outsourced offshore, especially to China, is done at contract manufacturers that have full assembly capability. You can say, "I want you to design" — I don't know what — "an eight cubic foot refrigerator," and they design it, and they build it, and they package it, and they do the paperwork, and they ship it to you kind-of-thing. There's almost nobody in the US that can do that. We tend to do machining, or painting, or foundry, or something. We don't do this complete assembly thing. So, companies that the higher, the more valuated the listener can go, the more they can get into assemblies or even complete products. There are companies that have offshored, outsourced offshore, that will be needing to find somebody with that capability to bring it back. Another issue in bringing things back — companies that offshored, say, 10 or 20 years ago often no longer know exactly how their product is made. The material has changed. The processes have changed. So, they're afraid to bring it back, because they don't know exactly how to make it, especially if they outsource it to somebody else. So, as contract manufacturers here, I would offer the willingness to look at products that are now being outsourced in other countries and to reengineer them, if necessary, to come up with processes, materials, etc. to make the product here at the quality level that the company wants, and, therefore, get the company over that hurdle.

Gregg Profozich [00:18:07] Are there any other items on the best practices list that you'd like to share with our listeners?

Harry Moser [00:18:11] Yeah. We talked about automation. Some people are afraid of automation. We hear these articles all the time, or news, about the robots are going to take all our jobs; tax the robots; all these crazy things. The reality is that in the US in manufacturing, productivity has been rising an average of 0.4 percent for the last 12 years, whereas in China it has been growing at about 7 percent per year. Now, their wages have been going up to 10 or 12. So, their costs are going up. But if they keep raising productivity like that and we stay at 0.4 percent, we're going to lose more jobs to Chinese automation by not automating here than we will to US automation if we do automate here. So, it's not like we're on an island, and there's only so much work to go around. By bringing the work back, by being competitive, we can increase US manufacturing by 40 percent, which means we can have an awful lot of automation and still have more jobs and better wages.

Gregg Profozich [00:19:12] Yeah. I think the statistics say that China is one of the largest producers of robots but also the largest consumer of robots worldwide.

Harry Moser [00:19:20] Correct.

Gregg Profozich [00:19:19] Okay. So, are there different approaches to reshoring, and if so, what are they?

Harry Moser [00:19:24] Well, it certainly differs by industry. Some industries never left; some industries are a huge investment. There's differences, certainly. Some are very labor-intensive. Apparel. Much of apparel is tough until better automation comes along to cut the labor content, and that seems to be happening. We've seen a fair amount of apparel come back. But thinking about categorizing companies, we'd say for OEMs the key is to look at total cost, to think lean, and to think in many cases outsourcing, because many of those companies have decided that manufacturing is not their core competence; then therefore, it's up to the US contract manufacturers of California to help them with that. For the SMEs, it's TCO for procurement to the extent that they're procuring. For example, if it's a molder who is unhappy with competing with Chinese molded products, well, where's he getting his mold? He's maybe buying a Chinese mold. So, for them, look at the total cost when you buy that mold, apply lean. Great opportunities there. Another methodology that I think is very helpful, QRM, quick response manufacturing, which was developed at the University of Wisconsin Madison. I've repeatedly seen studies where companies have cut their delivery times by half, or two-thirds, or three-quarters and cut their costs. So, a product coming in by surface from China takes six weeks, eight weeks, what have you, to get here. If you're half a day shipping time away from the customer, if you can get the product out of your factory as fast as the Chinese get it out of theirs, that means you can deliver six or eight weeks faster. In many cases, your customer will pay 5 percent, 10 percent more to have that security and to be able to keep their inventory down. So, a lot of emphasis on really quick quoting, really quick response, faster than the company can imagine getting from anywhere else in the world.

Gregg Profozich [00:21:15] So, powerful strategies with real practical application and real benefits to manufacturers. Thank you for sharing those. Based on those different approaches that we're talking about, Harry, I would assume that there's some advantages and disadvantages based on the type of the company. What might some of the pros and cons be for each?

Harry Moser [00:21:29] For the OEM there's some products that don't make sense to come back, because they're too labor intensive, and you just can't get it back here. In that case, it's not my first choice, but I then recommend nearshoring, something you mentioned briefly before. Product coming out of Mexico is on average about 40 percent US content, where a product coming out of China is 5 percent US content. So, I'm not here to sell nearshoring, but if we cannot get it into California, then I'd rather have it go to Mexico, and the US gets a third of a loaf instead of zero loaf. That's one possibility. For the SMEs I think it's a question of identifying what the opportunities are and then offering a better solution than what the OEM is finding at this moment offshore.

Gregg Profozich [00:22:21] Yeah. It's good to know there are options. Not all products are going to be able to be made in the US. But for the ones that can be nearshored to Mexico, having that 40 percent of the content on that nearshore product coming from the US is still good for our economy. Makes a lot of sense.

Harry Moser [00:22:34] I would add that in addition to the 20 percent or 30 percent that we might get back now if companies did the math, if the government would fund the MEPs better, to go out and help the companies. If they would get the dollar down by 20 percent or 30 percent would make a huge difference in the percentage of work that would come back if they'd spend a lot more on apprentice programs and certificates in comparison to basket weaving degrees. If we keep the corporate tax rate competitive instead of letting it go up and, once again, be one of the highest in the world, immediate expensing of capital investment. All these things can make a huge difference in being competitive. So, companies can do somewhat, but the government also has to take up some of the burden to make it competitive.

Gregg Profozich [00:23:17] So, it's all part of a larger ecosystem.

Harry Moser [00:23:20] Correct.

Gregg Profozich [00:23:20] Absolutely. Okay. So, how can manufacturers ensure that they're getting the maximum benefit from their reshoring efforts?

Harry Moser [00:23:27] So, the companies use total cost. It's free on our website. We're reshorenow.org. If you go there, you go to the TCO estimator. It's listed right at the top. You sign up. You sign in. It's free. You do it. We had a company outside of Chicago. They called me about four years ago, VP sales Tony. He said, "Harry, I'm about to lose a really big order. Can you help me?" So, Tony used the TCO estimator. I helped him. He calculated the TCO from the customer's viewpoint. He took it to the customer. I have a quote from him saying that using the TCO estimator was the key to saving a 60 — that's 60 — million dollar order from being lost to China.

Gregg Profozich [00:24:10] Wow. Those are some impressive results. I'd imagine that's one of many examples.

Harry Moser [00:24:16] That's my best.

Gregg Profozich [00:24:19] Fair enough.

Harry Moser [00:24:21] Some other things that companies can do is to promote reshoring on their website. There's a lot of companies right now — I get calls every couple of days — companies looking for someone to make stuff for them or companies wanting to help those companies. Increasingly, contract manufacturers on their website will say something about reshoring. They'll say, "Thinking about reshoring? Reasons to reshore. The benefits of reshoring. Concerned about your intellectual property? Worried about quick deliveries? Like to have a Made in USA label?" We know the reasons the company's reshored. You can go on our website and find those reasons and then say, "We are going to help you achieve these objectives that you're seeking." As examples, in Santa Rosa, Right Engineered Plastics on their website talks about reshoring, and in Torrance, Ace Clearwater does that. So, I would suggest any contract manufacturer or any SME that wants to benefit from reshoring, one way to do it is to tell people you're good at helping them reshore. Be direct. On our library the company can go in, and under library advanced search, they can go in it and say "manufacturing." We want to filter all the reshoring cases by manufacturing in California, and find all the reshoring that has occurred and FDI that has occurred into California. When those companies come back here, they need to find suppliers. So, find out who's reshored; go out to them; offer your services, if what they produce looks like you could supply some of the components. You can sell. We suggest pushing harder selling to foreign companies that build factories here, that there's a tendency for them, if they're big, to bring in foreign suppliers, to bring their own supply chain in. I think US companies could do a better job of becoming the supplier of choice. Fast communications. Just like you have a freight advantage, you've got a communications advantage. When your customer wants an answer, and they call you, it's during your daytime. When they call China, they're asleep. So, if you can get back to them in half an hour or an hour every time, and you can quote immediately, you're probably a day ahead of what the Chinese can do, or the Indians, and, therefore, hopefully, the customer will remember that. Automation is obviously important. All these things can help you succeed and get the work instead of it staying there or being lost to a US competitor.

Gregg Profozich [00:26:35] Because we've talked about some of the best practices and some of the benefits, the last question is: how can the Reshoring Initiative help companies achieve some of those benefits?

Harry Moser [00:26:43] Sure. I've mentioned TCO about 10 times. So, hopefully, everybody remembers that. You can see what other similar companies have reshored. If you are an injection molder, look on our website and find the cases of injection molding, or if you're a foundry, see the foundries that have reshored. It reminds me of Roger Bannister. This is maybe before most of your times, but he was the first to break the four-minute mile. Until then nobody believed it was possible. After he did it, then a lot of people did it, because they knew it was possible to do. So, just knowing that other people have reshored what you produce should be enough to say, "Well, if they can do it, then we ought to be able to do it." We offer services to help the company. So, TCO is free. We also have charge services — we have to survive — and one is called the import substitution program. Under that program a company — think a listener here — can identify a product that they're really good at making: flanges, wire harnesses, castings of a certain type, something rather specific. Then we tell them who the biggest importers of those products are in California, in the southwest, in the whole US if you want. Then the company, your client company, uses TCO to calculate to do like I did with Morrie Corp., to calculate the TCO from the customer's perspective. Goes to the importer. Instead of walking in and saying, "Do you need any castings next year?" and the porter says, "If I have an emergency again, I'll call you," instead, they say, "I know you're bringing in 50 tons of valve castings. We're great at making valves. Here's five references. We just put in a new molding machine that we think we're going to be pretty close on FOB price, and we've done the TCO calculation. We think you're going to be 15 points ahead. So, why don't we get together and make this happen for your company, for our company, for California in the US so you can sleep well at night and not worry about the next risk of pandemic or something like that?" So, we have the import substitution program. We have a program where we help the OEMs look at all the costs and make better decisions. We have the supply chain gap program. So, we identify the biggest gap where a lot is being imported, say $100 million, and looks like nothing's being produced here. So, that's a supply chain gap. Think masks, and gowns, and gloves, and penicillin, and things like that, which I should have been smart enough to identify a year ago. Then companies can decide to start producing those products. So, they become the only US supplier and knock some of those foreign suppliers out of the market.

Gregg Profozich [00:29:11] So, Harry, a lot of great information. Thank you so much for your time today. I really appreciate you sharing your insights and experiences with me and with our listeners.

Harry Moser [00:29:18] It's been great. You've been a great host and asked some really good questions, and I appreciate it very much.

Gregg Profozich [00:29:23] Thank you, Harry, and thank you for joining us in this conversation with Harry Moser on supply chain opportunities and reshoring. Thank you for listening to Shifting Gears  —  a podcast from CMTC. If you enjoyed this episode, please share it with others and post it on your social media platforms. You can subscribe to our podcast on Apple Podcast, Spotify, or your preferred podcast directory. For more information on our topic, please visit www.cmtc.com/shiftinggears. CMTC is a private nonprofit organization that provides technical assistance, workforce development, and consulting services to small- and medium-sized manufacturers throughout the state of California. CMTC's mission is to serve as a trusted advisor, providing solutions that increase the productivity and competitiveness of California's manufacturers. CMTC operates under a cooperative agreement for the state of California with the Hollings Manufacturing Extension Partnership Program (MEP) at the National Institutes of Standards and Technology within the Department of Commerce. For more information about CMTC please visit www.cmtc.com. For more information about the MEP National Network, or to find your local MEP center visit www.nist.gov/mep.

Topics: Supply Chain Management, Innovation & Growth, Business Growth Strategy & Strategic Planning

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