We’re in strange times. No doubt.
Here I am wondering about the future, worried about recent events, and what tomorrow will bring. That’s when I found a bright spot. Something as simple as a brief article.
It was optimism. Right there from Material Handling and & Logistics. It came from the Institute for Supply Management, Sept. 2, and it addressed manufacturers and suppliers, globally and nationally.
On Sept. 2, ISM reported, “manufacturing and the overall economy continued to grow in August … the purchasing manager’s index for manufacturers grew to 56.0% in August, an increase of 1.8 points from July.”
Growth. Success. Optimism.
It was refreshing to read – and the catalyst for a renewed energy to share my mission: how to engage manufacturers and all players across the supply continuum. To be available. To drive busines results. And to offer hope and help.
So, how do we get it done better than it was yesterday, and can we really do it more effectively, affordably, and consistently? Can we do it despite naysayers and what seems impossible? Is there an answer to the plague of delays and detriments, be they a supply chain kink in Guangdong, a trucking shortage in Mexico or a dozen other business-altering hiccups?
So, here’s my premise: We can pivot and complement The Norm of our business lives. We can build, grow, strengthen and solidify our manufacturing and do it right here, right now in the United States with less reliance on global suppliers. We can compress the supply chain, expand it within our own borders, limit external risks, build best-of-breed products and do so without increasing costs. We can also do it without abandoning our global partners. It’s a complementary, risk-reduction strategy. Maintain global presence, pivot to national reliance. It’s smart and pragmatic. Disclaimer: This is not intended to advocate isolationism, nationalism or anything political.
3 Observations: “Right Here/Right Now” Manufacturing
- Reduce Your Risk. Global suppliers are riskier than ever before. Getting supplies shipped across oceans and vast territories during a global pandemic is a gamble. It can be confusing and feel out of control. Think geopolitical upheaval, tariffs, intellectual property issues. Lack of communication. Suppliers shutting their doors. The ripple effect can rock your business.
- The Total-Cost Gap is Closing. In earlier times, China’s parts and labor were vastly lower than in the United States. Not anymore. For example, China’s emerging “middle class” is growing. This drives up wages. And your costs. It’s similar in Mexico. While closer in proximity, the country suffers from weak infrastructure (finding parts, transportation, quality sourcing partners, etc.). When comparing U.S. vs. global, examine costs. Total costs (the hard costs and the “soft costs.” Closely analyze your annual “other cost of goods sold.”
- Going National Really Means Going Local. I believe U.S. manufacturing is back—and is a clear choice. We share time zones, quality logistics and transportation, a workforce like none other and an ability to oversee and manage that’s more accountable and personal. And yes, total costs of goods sold are in line with global costs.
Lastly, I suggest you leverage your locals. Your alliance.
At the Electronics Alliance of Texas, we work with dozens of cross-sector manufacturing veterans who allow us to help them with business success. We consider ourselves to be collaborators; experts intent on achieving one mission: To connect the good with the good. That means we seek the best in people, partners, products, prototypes and more. You name it, we work to make it happen.
One last thought: My challenge is to reflect, review and re-visit on this world –and the accelerated change (the world was completely difference in January). Normalcy is “no normalcy.”
Yet, it’s a new day. And that means New opportunity. It opens the door for me and you to find new ways to do business.
And I am glad and blessed for that.
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