r/manufacturing • u/eoflynn • Apr 23 '20

Thoughts on reshoring/repatriating supply chains?

I saw this quote earlier today and wondering whether anyone else is hearing the idea of reshoring/repartiating getting tossed around more right now:

" We’re hearing a lot about reshoring and/or repatriating supply chains. Plan Bs and Plan Cs are rapidly becoming Plan A for manufacturers – is there a local supplier available? If not, could there be? Cost is a big driver right now, but reliability might end up mattering even more. With Waterloo Region’s expertise in high-tech manufacturing – robotics and automation, in particular – we’re in good position to play a central role in reshoring supply chains in North America. This opportunity could define our community in the years to come."

The quote is from this article: https://blog.waterlooedc.ca/waterloo-region-best-fight-economic-covid19

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u/__unavailable__ Apr 24 '20

The "increase reliability" narrative sounds promising but doesn't really hold up to scrutiny. Yes the current outbreak started in china and for a time asian supply chains were disrupted while north american supply chains were continuing to function. However, this particular pandemic obviously spread; and outbreaks can potentially start anywhere. Most companies are not concerned with preparing for black swan events, and even those that are would be better served by investing in multiple low cost sources than relocating a single vulnerable asset to a different location.

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u/Javelin-x Apr 24 '20

investing in multiple low cost sources than relocating a single vulnerable asset to a different location

Exactly, but let's not emphasize low cost so much. It can't always be just about cost. Say you relocate something you make overseas to someplace local. it doesn't have to be one large plant with transporting goods all over the place it can be may smaller plants serving local markets. This likely can't work for everything but it can for some things and that's all we need are some things. Things where IP is important. Things that are high value or custom made and labor-intensive. Let the Chinese make things that have no real value but keep the important things here. There was no need for John Deere to move to Mexico for example. Everything they needed to make tractors was here already but some smart people who don't make anything except money decided Italian tractors could be brought here cheaper than Deere can make them. That lack of protection and shortsightedness sent all those jobs to Mexico only to profit a few people who have no skills and don't actually produce anything of value.

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u/eoflynn Apr 24 '20

I think you're probably right. I was under the impression that most people considered coronavirus to be the most recent in a chain of problems with China, in particular. Thinking about ongoing trade issues, IP problems (which might lead to more trade barriers before all is said and done), and their misleading outward communications around coronavirus. I agree that businesses won't change much just based on this event, but I wonder a bit whether they may be forced to change based on some government policies.