Podcast: Manufacturing in the U.S. Cheaper than in China - Modern Distribution Management

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Podcast: Manufacturing in the U.S. Cheaper than in China

Founder of the Reshoring Initiative explains the hidden costs of offshoring.

\"DreamlandManufacturing Revival Radio is a Dreamland Radio production with hosts Todd Schnick and Todd Youngblood. On this show, we feature the companies, the leaders, the innovators leading the charge and driving the innovation. Through the blood, sweat, and tears of working men and women from here at home, to around the world. Learn more at Manufacturing Revival Radio.

If the words "total cost of ownership" are not currently on your mind, I can almost guarantee that that will not be the case after listening to today’s interview. We were glad to welcome Harry Moser, founder of the Reshoring Initiative, to join us for a discussion about a topic that we hope is sweeping the nation in 2013.

The Reshoring Initiative is an organization devoted to helping U.S. manufacturers realize the true cost associated with offshore manufacturing and educating them on the critical role they play in the future of the U.S. economy.  

Today’s discussion revealed some eye-opening statistics and some possibilities that the Reshoring Initiative is working to turn into realities.  

We’ve all heard the reasons why so many companies in the past have shipped their manufacturing jobs overseas. Lower labor cost and raw materials cost have always been the primary drivers. Often companies are able to look at these lower costs and compare them to the additional expenses of freight and justify their actions. However, more often than not, organizations are not looking at the true cost of their decisions.

Consider the additional cost of warehousing these shipped goods, or the expense of traveling overseas to set up and inspect your facilities. Let’s also not forget the intangibles, such as the loss of innovation when you move engineering away from manufacturing.

Moser left us speechless (which almost never happens) with some of his startling statistics. Consider this: When looking at offshoring on a purely cost basis, manufacturing in the U.S. costs are 69 percent higher than manufacturing in China. However, when an organization properly calculates the total cost of ownership, U.S. manufacturing actually drops to 4 percent lower than Chinese manufacturing.

Moser has a plan to bring back 1 million jobs to U.S. soil. 

Follow the Reshoring Initiative on Twitter.

Click on the play button above to listen to the interview, or download the audio file at Manufacturing Revival Radio.

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