Part 1: Understanding the Dynamics of Reshoring and What Success Looks Like

Hello, readers! Gary Hoover here from TBM Consulting Group, and I’m thrilled to welcome you to my discussion with Harry Moser, visionary, and founder of the Reshoring Initiative, where we investigate the current state of reshoring for manufacturers and suppliers.

I would like to invite you to listen to this three-part podcast series where Harry and I delve into the intricacies of reshoring, exploring recent trends, successes, and lessons learned.

In Part 1, we dive into the dynamic landscape of reshoring where we discuss the driving forces for companies moving out of Asia and provide real-world success stories and strategies. Listen to the podcast or read the excerpt of our conversation below.

The Driving Forces Behind Reshoring

Total Cost of Ownership Comprised

Initially, companies ventured offshore primarily for cost savings, drawn by the allure of products at 30-50% lower prices, especially from manufacturing giants like China. However, the tides have turned. Companies are now reevaluating their strategies, prompted by a deeper understanding of the total cost of ownership.

Harry sheds light on the multifaceted aspects comprising the total cost of ownership, from the base price to duty, freight, carrying costs of inventory, and risks like intellectual property. A notable study by Professor John Gray at The Ohio State University paints a vivid picture. Small to medium-sized companies, lured by lower prices and wages, eventually repatriated manufacturing after facing unforeseen challenges and costs over the years.

The Geopolitical Shift

In recent times, geopolitics has emerged as a decisive factor. Chief Executive Magazine’s survey reveals a shift in reshoring priorities, with companies ranking geopolitical risk, supply chain resilience, and proximity to management at the top. The survey found, “58 percent of CEOs whose companies have had recent operations outside of the United States now are considering reshoring, with 18 percent pondering the repatriation of three-quarters or more of their operations.

Success Stories: Proximity, Automation, and Innovation

The podcast showcases success stories that underscore the strategic approaches to reshoring. Bath & Body Works’ relocation near Columbus, Ohio, stands out. Motivated by quick market response, they attracted nine suppliers to establish factories on their campus, embracing proximity, automation, and just-in-time delivery.
Another compelling case study features NEDCO (New England Die Company), a small company out of Connecticut. Leveraging CNC machines, they slashed labor costs per product by a factor of six or seven, successfully bringing back work lost to China. Automation emerges as a key theme, addressing both skilled labor shortages and cost competitiveness.

The Future of Reshoring

As the conversation unfolds between Harry and I, it becomes evident that reshoring is not merely a trend; it’s a strategic imperative. Proximity to suppliers, automation, and a nuanced understanding of geopolitical risks are pivotal in the success of these endeavors.

Explore the Complete Series:

Frequently Asked Questions

What factors are driving renewed interest in reshoring manufacturing?

The video explains that renewed interest in reshoring is being driven by supply chain disruption, rising transportation costs, tariffs, geopolitical risk, and long lead times associated with offshore production. These pressures have forced manufacturers to reconsider total landed cost and risk exposure rather than focusing solely on piece‑price savings. Reshoring is increasingly viewed as a way to improve responsiveness and resilience in an unpredictable operating environment.

Why is reshoring not a simple or guaranteed solution?

Reshoring is not a guaranteed solution because moving production closer to home does not automatically fix underlying operational issues. The video emphasizes that higher labor costs, workforce availability, and execution capability must be addressed for reshoring to succeed. Without strong operational fundamentals, reshoring can introduce new cost and performance challenges instead of delivering the intended benefits.

What operational capabilities are required to make reshoring successful?

Successful reshoring requires disciplined execution, stable processes, and strong management systems. The video highlights the need for productivity improvement, process standardization, and leadership focus to offset higher domestic costs. When reshoring is paired with operational excellence and continuous improvement, manufacturers are better positioned to achieve flexibility, reliability, and long‑term competitiveness.