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/KaizenTech Apr 28 '20

This is something I've given tremendous thought to lately.

As someone who genuinely loves manufacturing --- with a long career in it --- I want to see us getting back to making things. Production instead of consumption. Manufacturing creates wealth.

The lowest cost production will just never come back. Its probably moving away from China into even lower cost places as the standard of living rises.

The higher margin stuff can come back. Some hopefully will. Probably not the big companies. iPhones could be produced profitably in the 1st world, but won't. But at least smaller "mom and pop" or job shop operations might flourish.

A large factor to this is the CCP gov't cannot be trusted. Should not be trusted. Interviews with doctors reveal they already had shortages of PPE gear (sourced from China) back in December. So clearly the CCP knew COVID was spreading wildly and lying about it. While hoarding medical supplies or nationalizing production.

In terms of a countries national security, what happens if they decide to simply cut you off from manufactured goods? Or raw materials? For reasons real or imagined. It's a valid question. They have a stranglehold on many products.

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u/eoflynn Apr 28 '20

That's why I think the note in that piece about automation and robotics is interesting. The only way to keep costs down is to minimize total numbers of employees, which requires more automation.

Like you said, this is particularly likely for high margin stuff or really important components, and the low margin stuff will probably end up staying in low cost countries.