Wal-Mart’s reshoring efforts are realWal-Mart’s reshoring efforts are real
Last week I wrote a blog about the Alliance for American Manufacturing calling out Wal-Mart for not doing enough fast enough to get more products reshored to the U.S. in accordance with its commitment to build its inventory of made-in-the-USA products.
July 13, 2015
Last week I wrote a blog about the Alliance for American Manufacturing calling out Wal-Mart for not doing enough fast enough to get more products reshored to the U.S. in accordance with its commitment to build its inventory of made-in-the-USA products. Harry Moser, founder and President of the Reshoring Initiative, called to tell me the other side of the story, though he admits some bias because he provides consulting to Wal-Mart.
He was at the recent Wal-Mart supplier summit and cuts them some slack because its reshoring effort started just over two years ago. Reshoring anything, whether you make it or buy it from offshore sources, isn't done overnight, Moser is quick to point out. He's right, and manufactured goods especially are difficult to reshore for a number of reasons, all of which Moser and I discussed at length.
For a company to reshore its manufactured goods, it either needs to establish a manufacturing plant, if the one it left behind was shuttered or sold, or find reliable manufacturing vendors. Neither of those options happens quickly. Specialty equipment used in the making of critical components typically would have been sold off or at least mothballed by the U.S. supplier when the OEM moved offshore. I read about one company that, after nearly a decade offshore, decided to reshore the product. Luckily, when the OEM contacted the U.S. supplier, it still had the special machine stored away in a back room.
Not only are machines mothballed when companies leave, many of the employees with talent and know-how also move on or go into different jobs. When both talent and equipment are lost due to offshoring, it's not easy to get these back when an OEM decides to reshore its products.
"We've lost so much manufacturing in this country, we can't possibly get it back overnight," Moser said.
Still, there are a number of companies that are reshoring, many of them citing Wal-Mart's pledge to buy US-made products as a primary reason. For example, as noted on Moser's Reshoring Initiative site, Anchor Hocking and Taylor Made Products moved some housewares/kitchen utensils from China to Elroy, WI, citing Wal-Mart's pledge as one reason, but also noting that shipping delays at the West Coast ports because of longshoreman union strikes and "contamination in plastics used in utensils" were major contributing factors to reshoring.
Calibowl, an injection molded, plastic, non-spill mixing bowl, was reshored from China to Union City, CA, and 20 people were hired as the company sought to improve quality, meet customer demands for products made in the United States and implement just-in-time manufacturing. The company now has a large "made in USA" sign on its home page.
Creative Things Inc., a plastics company that makes a variety of consumer products and supplies Wal-Mart, began the process of moving the company's manufacturing from China to its home base in Gentry, AR, five years ago. While that was several years before the Wal-Mart pledge, President Keith Scheffler was already aware of the reasons reshoring would be good for the company and the local economy. It wasn't an easy proposition, as noted in several articles that ran last fall in local news publications, specifically finding the 64 employees that this newly reshored work would require.
Another problem in determining what is made in America is that Wal-Mart doesn't audit its suppliers. Moser points out, in Wal-Mart's defense, that with something like six million SKUs in its online store, it is enormously difficult to compare what's on the label with where each component in a product is made. "Because Wal-Mart doesn't audit every supplier, occasionally it will come across something that clearly isn't made in the USA, such as the television sets from Element Electronics," Moser said.
Moser believes that Wal-Mart is making a valiant effort in trying to get more of the products it sells made in the USA because the company understands that it's good for jobs. And Moser also believes that reshoring is real. "I've got a file of about 40 cases that have reshored products to the U.S. and claim that it was done because of Wal-Mart's commitment to buy U.S.-made products," said Moser, noting that his website is full of advice to help companies reshore manufacturing including what products are good candidates for reshoring, how to locate moldmakers and molders, how to be more competitive in the U.S., how to submit products to retailers in addition to Wal-Mart, how to get financing and much more.
Moser added, "I wouldn't do all this work if I didn't think reshoring was real, but I think it's the right thing to do to help companies make this transition."
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