Manufacturers throughout the United States have been forced by a pandemic-creating virus to rethink their global supply chain and the critical nature of disruptions that can happen overnight that put production in jeopardy. Those OEMs that took production offshore or that have offshore vendors are realizing the tremendous costs of that decision.
Re-shoring is top of mind with product makers now planning their post-pandemic road forward, according to Sussex IM, a full-service custom injection molding operation based in Sussex, WI. Its customer portfolio includes globally known brands in demanding markets such as beauty, healthcare, and consumer products.
“Supply chain risk is a key concern of our customers, as they chart a path to a new future,” said Sussex IM’s CEO Keith Everson. “Our central U.S. location offers true added value to our business partners. The rebound will come, in time, and when it does, the supply chain-related lessons of the recent past will remain a key part of the equation.”
U.S. Trade Representative Robert E. Lighthizer wrote in an editorial, “The Era of Offshoring U.S. Jobs is Over,” in the May 11 edition of the New York Times that it was shortsighted of U.S. manufacturers to move manufacturing for a “lemming-like desire for efficiency . . . to save on labor costs or to avoid environmental standards.” Things are beginning to change, as many OEMs and parts suppliers are rethinking this move after realizing “that offshoring creates risks that often outweigh the incremental efficiencies.”
According to Everson, priorities have shifted and continuity risk is a more vital consideration than in years past. “Competition is more challenging than ever, and customers must evaluate other factors against the downside of failing to fulfill orders. That frequently means the selection of suppliers in closer proximity, rather than across the sea. Re-shoring is simply smart business.”
A company’s proximity to domestic customers plus in-house automation, made-in-USA quality, and improved efficiencies in cost, time, and energy is a welcome respite from international disruptions.
Sussex IM’s Everson said that meeting customer demands of the future requires significant capital investment.
First, a plant expansion is in the planning stages, with groundbreaking later this year.
Second, Sussex IM has embraced Industry 4.0 manufacturing techniques, ideal for today’s business climate, when innovation, competitive pricing, on-time delivery, and quality are critical to product success.
Third, Sussex IM is converting one of its five plants to an ISO Class 8 cleanroom to satisfy existing medical/pharma customers and offer growth opportunities.
Finally, the company plans to expand its Advanced Manufacturing Facility, which includes ISO Class 8 cleanrooms and specialty manufacturing cells.
A recent article in the Wall Street Journal underscored the supply-chain security issue. “Companies are likely to continue facing issues across their supply chains, even if the bulk of their systems are operating,” Paul Donovan, Chief Economist of UBS Group AG ’s global wealth management unit told the WSJ. “What I think COVID-19 has done is add another cost to having a long and complicated supply chain,” he said. “Over time, Mr. Donovan believes companies will look to localize more production, allowing for easy access to inventories,” added the Wall Street Journal.
“Our location, advanced robotics and automation, end-to-end suite of capabilities and services from product design to warehousing, and collective experience of our people all combine to reduce supply-chain risk,” Everson said. “Our customers can count on us and, these days, that is more compelling than ever.”
Image: Iaroslav Neliubov/Adobe Stock