Two engineer working with an industrial automation robot

How a tech partner can help organizations that are reshoring manufacturing

By Dave Laux, Vice President, Manufacturing Industry

Summary

Discover how working with a tech partner can help manufacturing companies with reshoring.

Read time: 4 minutes

A large number of companies are looking at reshoring their manufacturing operations. This article looks at what that is, what it means, the challenges that come with it, and how companies are supporting their efforts.

What is reshoring?

Reshoring, also known as onshoring, is the opposite of offshoring and is the process of businesses reshoring manufacturing and bringing production back to the company’s original home.

How many companies are reshoring?

According to Reshoring Initiative® data, 1,675,000 jobs returned from offshore and reshoring manufacturing efforts.¹ Additionally, a recent survey found that 62% of manufacturers have started reshoring or nearshoring their production capacities.² It’s also interesting to note throughout 2023, manufacturing construction spending surged over 80%, compared to only six percent for other categories of private nonresidential building.³

Why are organizations reshoring manufacturing?

Reshoring manufacturing has become a trending topic in recent years. Companies are moving their operations closer to home for various reasons, but experts say there are five likely inflection points driving this shift:

  1. Persistent factors such as trade tensions and geopolitics

  2. The pandemic strengthened the case for supply chain localization

  3. The increasing costs of offshore labor and transportation

  4. Customer demand and the need for shorter lead times to enhance the overall customer experience

  5. Environmental, Social, and Governance (ESG) commitments, due to an increased focus on carbon emissions and workforce health and safety programs

How a tech partner can help organizations that are reshoring manufacturing

Manufacturers who are reshoring can benefit by working with a tech partner for a variety of reasons. A tech partner becomes an extension of your internal IT teams and can help businesses mitigate the impact of supply chain disruptions and find new sourcing options.

Finding qualified, capable technicians can be a difficult task. The shortage of skilled labor throughout the U.S. can be a real challenge. An outsourced tech partner has access to knowledge and experience from a larger talent pool of qualified technicians. Access to skilled technicians allows manufacturers to reach their goals faster — no need to find and vet candidates or train in-house staff members.

Here are some key considerations to keep in mind when selecting a third-party tech partner.

Expertise

Look for a partner that has deep knowledge in your industry and most importantly, one that can provide you with the expertise to integrate technologies in a cybersecure manner. Questions you may want to ask are:

  • Does the tech partner have experience with manufacturing companies?

  • Are they versed and up to date in cybersecurity best practices?

  • Have they assisted with scaling automation or robotics?

  • Do they have a history of working with smaller companies or start-ups?

Communication and accessibility

Communication and accessibility are key when working with a third-party tech partner. Make sure they are responsive and easy to work with. Questions to think about include:

  • Does the tech partner offer onsite, dedicated support?

  • Does the service provider have the resources where and when you need them geographically?

  • What sort of hours and SLAs can they support?

Time and cost-savings

Outsourcing routine maintenance and support means paying for a high caliber of service that ultimately benefits your equipment — improving machine function, efficiency, and life span. A great customer experience also translates into increased return on investment. But, keep in mind, service needs to come with an SLA that guarantees against your requirements and organizational goals.

Strategic alignment

The right tech partner will be both a culture and an economic fit, this includes:

  • Cultural fit — aspects such as quality, lifecycle support done right, success planning process and strategic alignment and end-state thinking are all important when seeking a tech partner.

  • Economic fit — for example, value added should benefit both organizations and celebrated through customer wins.

Tech partners elevate your business and assist with reshoring manufacturing

Reshoring manufacturing can be costly and time-consuming for businesses, but it can be a viable (and profitable) solution to avoid further disruption from global supply chain challenges. Third-party tech partners can help businesses mitigate the impact of supply chain disruptions and find new sourcing options. By selecting the right third-party tech partner, businesses can ensure that they have the expertise they need to succeed.

We can help

A strategic tech partner allows manufacturers to focus on creating, innovating, and growing their business instead of sourcing, hiring, and training skilled tech talent.

Our Service Advantage solution can help. We’re not just a partner; we’re an extension of your team, giving you one point of contact to help you manage it all. From training, education, and deployment to service, maintenance, and replacement for the entire lifecycle of your equipment and technology.

Learn more about how partnering with Service Advantage can benefit your organization reshoring manufacturing.

Dave_Laux_headshot.jpg
Dave spearheads the Manufacturing Industry team for Ricoh USA. Dave has over 30 years’ experience working in the manufacturing and industrial sectors. Dave has owned and operated several manufacturers and has helped many of the world’s largest manufacturers optimize their operating, back office, and technology environments to achieve their productivity and efficiency goals. Starting on the plant floor, operating machinery, Dave progressed to executive ranks and ultimately ownership. By focusing on overall operational efficiencies and process enhancement, Dave helps companies increase efficiencies, reduce labor dependencies, increase desired retention, and attain profitable growth. Dave has a Bachelor of Science in Economics from the University of Missouri and has completed post-secondary education at Harvard University School of Business, and Boston University. Dave has also held executive roles at IBM, Gartner, and Lumen, all focused on manufacturing.

Dave Laux

Vice President, Manufacturing Industry

Ricoh USA

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  1. 1reshorenow.org/companies-reshoring/
  2. 2www2.deloitte.com/us/en/insights/focus/transportation/future-of-transport-industry.html
  3. 3www.forbes.com/sites/billconerly/2023/08/19/us-manufacturers-reshoring-but-it-will-take-a-long-time