Thursday, September 27, 2012

Reshoring: The New Manufacturing Trend

Offshoring, or sending a portion of a company’s business overseas, became a common business practice during the economic recession when our nation was struggling to stay afloat. Since 2002, about 3.5 million manufacturing jobs have been lost across the nation.

However, the more recent trend in manufacturing is re-shoring, or the opposite of offshoring. Shifting a portion of business back to U.S. soil has been occurring more often these days. According to a recent survey conducted in April by Forbes contributor Vivek Wadhwa, "40% of companies indicated that they have won new manufacturing business this year that had been previously offshored."

Why the return home? There are a number of reasons why manufacturers are returning their operations to America. Re-shoring:
  • Reduces total cost of ownership
  • Improves quality and consistency of inputs
  • Reduces pipeline and surge inventory impact on just-in-time operations 
  • Clusters manufacturing near Research and Development facilities, which enhances innovation
  • Reduces intellectual property and regulatory compliance risk 
  • Eliminates the waste and instability caused by offshoring
  • Strengthens companies’ ability to respond quickly to customers’ demands
  • Brings jobs back to the United States and Michigan
  • Helps to balance federal, state and local budgets
  • Motivates recruits to enter the skilled manufacturing workforce
  • Strengthens the defense industrial base

Many of these benefits have translated into substantial amounts of manufacturers returning home. The return of offshore production to the United States has been a bright spot in our recovery. The hope that those lost manufacturing jobs will come back is coming to fruition, with companies such as Toyota, Siemens and Rolls-Royce announcing that they will ramp up production in the United States and export their products across the globe.

Since 2009, MMTC has been tracking the Cost to Output ratio or Global Cost Index, between US companies and their global counterparts, to help companies understand where improvements can be made to become more globally competitive. In addition, several MMTC clients have reduced operating costs through increased efficiencies and process improvements, thereby increasing their competitiveness with an offshore producer of the same products. Detroit Chassis and International Specialty Tube are two such companies that were able to bring outsourced work back to fill the additional capacity.

If you are looking for ways to bring your production back to Michigan, Contact MMTC to learn about our Manufacturing Solutions.

Picture by Discover the 

Wednesday, September 12, 2012

Successful Hoshin Planning and Deployment

Hoshin Planning is a management methodology which aims to create strategic goals and insight for an organization. The main idea of Hoshin Planning is that the collective thinking power of all employees makes an organization the best in its field. The methodology is meant to help a company focus on a shared goal by communicating it to all leaders, involving all leaders in creating a plan to complete the goal and holding participants accountable for achieving their part of the plan.

Successful Hoshin strategies require coordination within the departments of the organization and the process owners. Each level in the organization has its own detailed responsibilities that play a part in meeting the organization’s main goal, so that everyone in the company is working together.

Venchurs, Inc. The Hoshin Process successfully fit into the Lean Management philosophy of MMTC client and Michigan manufacturer Venchurs, Inc. Venchurs provides a full range of supply chain management services for automotive, agriculture and construction Original Equipment Manufacturers. Their services include logistics, inventory management, order processing and more.

The Venchurs transactional Lean transformation included a strong use of metrics, robust standard work, quick changeover, visual management and communications, kaizen improvements and A3 reporting. The continuous improvement cycle of the Hoshin Process ensured that the team reviewed the plan’s goals, implementation and process.

Implementing the Hoshin Process into Venchurs’ operations allowed the company to improve their data gathering and communication. Sharing actionable data with employees at all levels allowed the Venchurs team to see where improvements were needed and to gauge the progress of their initiatives.

The impressive impact of their efforts resulted in millions in increased sales and saved $350,000 in avoided costs.  Additionally, Venchurs was able to invest additional dollars in the business and add jobs that successfully contribute to their ongoing growth and success.

To learn more about how Venchurs implemented MMTC’s Innovative Strategic Planning Solutions, click here to get started. For more information about MMTC training classes, seminars, and programs Contact MMTC.