Tag Archives: Reshoring

How’s your supply chain running these days? If you’re like most manufacturers, you’re still experiencing challenges. Big challenges. The pandemic threw the worldwide supply chain into chaos and it hasn’t yet recovered, but the truth is, there have always been supply chain issues bedeviling the industry. The pandemic just exacerbated what already had the potential to go wrong and uncovered new problems lurking just below the surface.

Just-in-time strategies, which were (and continue to be) popular methods of having just the right amount of inventory on hand at any given time, left manufacturers vulnerable to supply chain disruptions. The increasing complexity of global supply chains didn’t help the situation, nor did the pervasive lack of visibility into supply chains themselves.

What are manufacturers facing this year in terms of their supply chain? Let’s take a look at these issues, and examine some ways USC can help.

Manufacturers supply chain challenges for 2024

Materials shortages. Global instability, the lingering effects of the pandemic and other factors are leading to shortages of raw materials and components. Production delays, increased costs and unhappy customers are the result. And speaking of costs…

Rising freight costs. As fuel prices ride the same roller coaster we’re all seeing at the gas pump, and labor shortages and ongoing congestion at ports collide, it means costs to get those components and materials are going up, eating into your profits. And speaking of labor shortages…

Labor shortages. This problem is ongoing, and we have to say, it’s one thing that wasn’t caused by the pandemic. Manufacturing workers are aging and retiring, and there isn’t a large pipeline of younger people with the skills to replace them. It means reduced output and productivity, dwindling motivation and drive, and the loss of institutional knowledge.

DRIP. It stands for data rich, information poor. When you’re talking about the supply chain, it means you need to use data to its fullest. Outdated inventory systems won’t cut it.

Tactics that can help

Diversifying supply chains. Having too many eggs in one basket has proven costly when that basket falls apart. Reliance on any one supplier, especially if that supplier is overseas, is becoming yesterday’s strategy that is just not working in today’s market.

Reshoring. Supply chain disruption, ongoing global instability, higher costs (including higher labor costs in China), increased lead times and more hassles are leading companies to reconsider foreign sources. Many are already doing it. Yahoo Finance reported in June 2023 that 80% of manufacturers are now considering or acting on reshoring some or all of their production. A couple of quick examples: General Motors invested $7 billion in production facilities in Michigan to not just manufacture electric vehicles but the batteries that power them. Intel invested $20 billion in a new semiconductor manufacturing plant in Ohio, and is investing $30 billion for a similar facility in Arizona. Some manufacturers are “nearshoring,” bringing production closer to home, from China to Mexico, say. Not only will this reduce lead times, improve quality control and leave companies less vulnerable to global unrest, it will also create jobs here at home.

SIOP. We laud this tactic often because it really does improve efficiency, but in the age of supply chain disruption, it’s crucial. Sales, Inventory and Operations Planning (SIOP) is a collaborative process that aligns all departments. It involves using inventory as a strategic tool, demand management and supply planning, giving you the ability to capture, analyze, integrate and interpret data to give you a strategic advantage.

Learn more about SIOP in our free eBook, Sales, Inventory and Operations Planning: It’s About Time.

Solid training. The labor shortage isn’t going away, and we’re finding that many manufacturers are investing in training, ensuring that everyone is doing the job the same way, with rock-solid operating procedures. It’s a powerful way to keep institutional knowledge within your facilities, instead of losing it when people retire.

At USC Consulting Group, we have over 55 years of experience helping manufacturers ramp up their efficiency, production and operations. It’s especially crucial to be firing on all cylinders during challenging times… and we’re in them, right now. Give us a call and let’s talk about how we can help.

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What’s keeping manufacturing CEOs up at night? From supply chain disruptions to a disengaged workforce and growing skills gap, there are challenges aplenty plaguing leadership teams. Here are the top five manufacturing issues along with solutions from USC Consulting Group that will help them sleep a little easier.

Problem: Retiring workforce

My best shift supervisor is retiring next month! He knows everything there is to know about the line. How can I possibly replace him?

“The median age of manufacturing workers is 48 and continues to grow older.”

Solution: Capture that knowledge!

Before your seasoned vets retire, create mentorship programs, have roundtable discussions and update manuals with their hard-earned know-how.

Problem: Skills gap + Jobs gap

I have positions to fill but I’m not finding any qualified candidates! How am I supposed to get the job done?

“Manufacturers will have 2 million jobs to fill by 2030. But there’s a skills gap out there. A sea of open jobs and few skilled people to fill them is a one-two punch.”

Solution: Build training into your budget

Skill them up yourself! Invest in training for new hires and partner with a local trade school or community college to target new grads.

Problem: Disengaged employees

Are my employees happy? It’s like they’re just going through the motions. Are they going to quit?

“Only 36% of U.S. employees are engaged at work and 74% are actively looking for a new job at any given time.”

Solution: Walk the shop floor

Talk to the team, ask how things are going and how you can help. If they’re short-handed, roll up your sleeves! Also, promote from within and invest in career development! It’s a proven way to build morale and engagement.

Problem: Supply chain disruptions

My line was down AGAIN because our overseas supply was stuck at a port. Again! We have high customer demand but can’t meet it because we can’t get the supplies we need!

“A 400% increase in shipping costs from China and a 45% increase in ocean freight wait times is expected to continue for 6 to 12 months, if not longer.”

Solution: Reshoring      

It has long been suggested as idealistic and beneficial for the country, yet unrealistic. That is, until now. It’s time. Reshoring is a way for U.S. manufacturers to invest in the country and claim valuable subsidies, while also shielding themselves from any potential global supply chain issues.

Problem: Inventory management

All of my departments have a different view on inventory management! Some want excess inventory. Others want it just in time. Do we have enough? Too much?

Solution: Sales, Inventory & Operations Planning (SIOP)

SIOP expands on S&OP by adding a crucial component: Inventory. It helps you wrangle your inventory management and achieve the optimal supply balance.

Want to learn more? Read What’s Keeping You Up at Night? The Main Concerns of Top Executives.

These aren’t the only challenges keeping CEOs up at night. At USC Consulting Group, we have more than 50 years of experience helping manufacturers find opportunities for greater efficiency and productivity. Call us today to talk about how we can help you get a good night’s sleep.

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Slowly but surely, consumers are returning to the marketplace in full force after a number of tumultuous years. According to Industry Week, consumer spending is up 20% from this time last year. While that number is great for a manufacturer’s balance sheet, there are still challenges in the industry that are keeping CEOs up at night. Here is a look at a number of concerns of top executives — and ways you can tackle them head-on to get a good night’s sleep.

Problem: Retiring workforce

Ah, retirement. The day valued, longtime employees get their gold watches and leave the plant for the last time. It’s great for the employee, not so much for their CEO. That’s because as retirees head out to enjoy their golden years, they’re taking all of the institutional knowledge they’ve learned over many years on the job with them. The median worker age as of 2018 was 44.1 years old — over two years older than workers in other industries. And that was in 2018, the most recent stat. Those folks are 48 now. But you don’t need stats to tell you that. A walk around your shop floor (or a talk with HR) will give you the lowdown on how many of your employees are nearing retirement.

Solution: Capture that knowledge

It pays to be proactive in most situations and this is one of them. Capture that institutional knowledge before your seasoned vets walk out the door. Create mentorships between older and younger workers. Film a roundtable discussion featuring your best older workers talking about the ins and outs they’ve learned over the years. Ask your seasoned vets to be part of updating your manuals. At USC Consulting Group, when we go into a manufacturing business to improve efficiencies, we understand that the people on your front lines are your greatest resource and our greatest ally in that effort.

Problem: Skills gap

The other side of the institutional knowledge coin is the lack of skilled workers to replace them. You’ve heard about the skills gap, certainly, and this is it. There is a dearth of qualified people out there. Or enough people. Manufacturers in the U.S. are expected to see 2 million unfilled jobs by 2030. It paints a grim picture for companies that aren’t planning or prepared for the future of their workforce.

Solution: Training

If you’re not finding skilled people, one solution is to create robust training programs that will get them the skills they need. It’s an investment, yes. But a worthy one.

Another tactic: Partner with a local trade school or community college to target upcoming grads.

Problem: Employee engagement (or lack thereof)

Are your employees happy? Do they feel valued and appreciated? If you don’t know, now’s the time to find out. To add to the problem of an aging workforce retiring and taking their skills with them, the new generation of warehouse and manufacturing workers are less and less inclined to begin and continue careers in the industry. The Great Resignation is a countrywide juggernaut that has prompted many of the younger workers to resign from and reject positions where they don’t feel adequately fulfilled or see a future career. The manufacturing industry is not immune.

The younger generation of workers needs validation and appreciation to stick around. Only 36% of U.S. employees are engaged at work and 74% are actively looking for a new job at any given time with their current employer.

Solution: Start walking the floor

Walking the floor is an oft-overlooked yet crucial way for managers and executives to engage with their team, foster relationships and directly affect employee retention in a positive way.

Getting out onto the shop floor shows employees that their employer cares about them and their career. For the employer, this strategy fosters retention while also affording an opportunity to discover any standout employees or ways to improve day-to-day operations. This directly combats an aging workforce by keeping new employees around long enough to become skilled themselves.

Another tactic: Invest in career pathing for your employees. It starts with promoting from within and giving people a roadmap for how to get there. It’s a powerful tool. In fact, 94% of employees said they would stay at a job that invested in their career development, according to a survey on LinkedIn.

Problem: Worldwide supply chain disruptions

While the COVID-19 pandemic has slowed down, the manufacturing problems it caused are still very prevalent in the industry today. Bottlenecks in every level of the supply chain and overcrowded shipping ports have become the norm over the past few years — with little signs of slowing.

According to Industry Week, a 400% increase in shipping costs from China and a 45% increase in ocean freight wait times — both increases relative to last year — is a trend that could continue for 6 to 12 months, if not longer.

Solution: Reshoring

Reshoring has long been suggested as idealistic and beneficial for the country, yet unrealistic. That is, until now.

The dramatic increase in outsourcing costs and interminable shipping wait times has resulted in many Fortune-500 companies — General Motors, Toyota and Samsung, to name a few — making considerable investments in the improvement, expansion and new developments of their manufacturing plants in the U.S.

Reshoring is a way for U.S. manufacturers to invest in the country and claim valuable subsidies, while also shielding themselves from any potential global supply chain issues.

Problem: Inventory management

Dialing in proper order quantities, reorder triggers and keeping an accurate and adequate lead time have long been hot buttons for manufacturers. The aforementioned bottlenecks and disruptions have not helped.

The issue compounds when all departments have a different viewpoint on the situation: operations, sales, finance and business executives can all have contrasting requirements and best practices when it comes to an inventory management philosophy. Any divergence in departmental expectations mixed with a lack of communication can spell disaster for any manufacturer.

Solution: SIOP

SIOP expands on S&OP — the business management process that involves sales forecast reports and planning for demand and supply — by adding a crucial component: Inventory.

SIOP is a powerful tool that helps your company get departments in sync, ensures that everyone is on the same page and realistic about the process, helps you manage and roll with changes, and measures performance.

“A key to SIOP is to emphasize inventory as a strategic tool to help offset variation in either demand or production issues,” explains David Shouldice, Senior Vice President and Managing Director at USC Consulting Group. “One lever of control in the SIOP process is to make inventory harder working as a strategic tool.”

SIOP helps you wrangle your inventory management, achieve the optimal balance between not enough and too much, and settle back into Lean manufacturing principles that can eliminate waste and help ramp up your efficiency.

These aren’t the only challenges keeping CEOs up at night. At USC Consulting Group, we have more than 50 years of experience helping manufacturers find opportunities for greater efficiency and productivity. Call us today to talk about how we can help you get a good night’s sleep.

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