Liberty has worked with customers previously that were not realizing the expected benefits of using an offshore supplier, but recent events have a lot more OEM’s looking to move some or all of their supply chains to the United States. The Institute for Supply Management reported last month that nearly 75% of companies are reporting supply chain disruptions. A recent Thomas Industrial survey reported that 64% of manufacturers are likely to bring production and sourcing to North America, and this number has been growing.

In this episode of Wired Success, Mark Cessar ask Liberty Electronics’ Director of Business Development, Scott Anderson, about the rising opportunities for reshoring the supply chain from oversees suppliers.

Mark:
Welcome to another episode of “Wired for Success” by Liberty Electronics. My name is Mark Cessar and I’m here today with Scott Anderson, the Director of Business Development here at Liberty Electronics and has been for the last 21 years. Today we are here to talk about reshoring. So Scott, I’ll just start it. Why are we making a video about reshoring?

Scott: 
Well hey, thanks Mark. It’s good to be with you again. Well, reshoring, as you can imagine, is a hot topic recently. Liberty has worked with customers over the years that have not realized benefits from offshore suppliers, but recently a lot more OEMs are looking to move from offshore suppliers to domestic suppliers. The Institute for Supply Management recently reported that 74% of companies have experienced supply chain interruptions and Thomas Industrial Survey reported that 64% of companies are actively looking to move their some or all of their supply chains to the United States.

Mark:
This may seem like an obvious question, but why is there an increased interest in reshoring, Scott?

Scott: 
Well, it’s no surprise but the COVID-19 pandemic is driving a lot of this. Companies have not been able to get their parts shipped, factories have been closed, and they’ve suffered as a result. And a second factor is tariffs. Since the Trump administration has imposed stiffer tariffs on some countries, the OEMs have experienced some cost increases that they’ve had to deal with. A third is the USMCA that was just enacted here on July 1st. It replaces the NAFTA Agreement, but it is expected to have upward pressure on Mexico’s labor rates.

Mark:
Do you expect any other factors to drive this movement?

Scott:
Well US energy costs have been coming down. We’ve increased production, lowered cost, and have become a net exporter of energy. So that helps US manufacturers both with product cost and with transportation costs, and I’d add to that, there seems to be an increased awareness of natural disasters. You may recall the earthquake and tsunami that hit northern Japan and resulted in the Fukushima nuclear reactor incident. That it was a huge disruption to supply chains. And more recently closer to home, in 2017 hurricane Maria, when it hit the Caribbean, caused damage to supply chains. Liberty in fact, was able to pick up some business when one of our competitor’s factories closed there. Another issue is that we might have reached a tipping point with the theft of intellectual property. There seems to be much more awareness of that. There’s some threats of regional conflict, the South China Sea for example, that have made people nervous. And then crime is also an issue. We’ve had customers say that they’re actually afraid to travel to certain parts of the world because of crime.

Mark:
When reshoring, why should an OEM consider Liberty Electronics?

Scott:
Well the first thing that comes to mind is location, location, location. Liberty is blessed to be located in a part of the country that both geographically and culturally is a low-risk area. And then second, I would say, our experience in helping OEMs transition from one supplier to another. We have some robust processes in place and technology in place that really helps smooth the transitions, and one of the things that we’ve learned from our customers is that when considering the cost of poor quality, cost of mis-deliveries, Liberty can actually lower their overall total cost of ownership.

Mark: 
Well thank you, Scott. My name is Mark Cessar and this is Scott Anderson thank you for tuning in to this episode of “Wired for Success” by Liberty Electronics.

*  *  *

Liberty Electronics helped a number of customers transition from both foreign and domestic suppliers. We have some robust processes and technology in place that are critical to successfully switching suppliers. One of the things we’ve learned from our customers is that Liberty can provide the lowest total cost of ownership for them. They’ve pointed to savings in the cost of poor quality and delivery as making the difference between Liberty and offshore suppliers.