Subtle Shifts: How to Begin the On Shoring ProcessAfter addressing the primary reasons we see on-shoring as a high value choice for almost any modern company, it’s only appropriate that we discuss how you can begin the process now.
The brief points below will give you a fast ways that you can get started moving your operations back to U.S. soil.
Planning, Planning, Planning
I won’t make light of it. On-shoring is an incredibly complex task for anyone with well-established operations in a foreign country. Accordingly, the first step to beginning the process is developing a comprehensive, long-term plan around the changes.
Assuming you’ve already run due diligence on several U.S. suppliers and noted several candidates, consider the internal changes that will be necessary to execute. Who will principally be responsible for coordinating the change and how will positions necessarily shuffle through the process? Will additional hires be necessary, even if only temporary?
Address the risks surrounding the process. What interruptions could occur and how will you deal with them? Further, what does the time frame for completion look like? Depending on your volumes and processes, on-shoring will likely be a multi-year process. Even so, risk mitigation begins as soon as your domestic supplier begins working.
Hire a Consultant
Subtle Shifts: How to Begin the On Shoring ProcessEarly in the on-shoring process, find a supply chain consultant that can help you make the change.
Consultants have wide networks and knowledge of suppliers in multiple geographies. Their expertise is in finding the most-efficient suppliers and negotiating the best terms for your company. All of this makes them the perfect partner to help you select a replacement supplier and ensure that the process runs smoothly.
If you operations are particularly complex, there is a good chance that the switch will require personnel that you don’t currently have in-house. Managing the logistics of your current operations is probably burdensome already; attempting to get current staff to also implement a new solution may well break the horse’s back. Engaging a supply chain consultant, even on a short-term basis, could prevent anything from slipping through the cracks created by stretching your current employees too thin.
Bring Final Assembly to the U.S.
Subtle Shifts: How to Begin the On Shoring ProcessIf the entirety of your manufacturing operations are international, moving final assembly to the U.S. could be the perfect first major step within the process of on-shoring.
Final assembly is often the most complex task in your supply chain. It requires the greatest logistics finesse and is the final point of quality assurance before you product goes to market. All of these facts make having stricter control, greater visibility, and increased communication paramount. By moving your final assembly to the U.S., you can only increase the quality of what you are producing.
Use bring final assembly to the U.S. as a benchmark. Quantify and record how much this small on-shoring move impacts your operations as much as possible. This analysis has to go much further than just cost analysis, however. How much more quickly were you able to implement design changes with final assembly in the U.S.? How much faster were your phone calls returned and invoices handled? Also, how much did the change affect your risk? The benefits you experience from moving your supply chain to the U.S. will grow exponentially as a greater portion of your operations are on-shored.
The choices you make for your supply chain must be made with respect to reducing cost, mitigating risk, and enhance flexibility. As foreign manufacturing options quickly rise in cost, the deep risk and rigidity that they are associated with will quickly offset any savings you might be holding onto.
Take action now to begin the on-shoring process and you’ll be setting your company up to maintain a leadership position for the long-term.
Video – Reducing Supply Chain Cost
We are curating a conversation about reducing supply chain cost at costflexrisk.com. We interviewed Mike Mason, CEO of Weathermatic, Inc., about setting cost cutting priorities, and how he got there. Click the image below and you will be taken to costflexrisk.com to watch the video:
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