“America is back in the factory business,” according to Census Bureau data cited in a recent Wall Street Journal article.
According to those statistics, construction spending for new manufacturing sites set an all-time record in 2022 at $108 billion. Chalk it up to a perfect storm of China exits, Inflation Reduction Act incentives and continuing post-COVID supply chain restructuring.
Manufacturers said that speed, flexibility and cost are the triple motivations for their moves. A made-in-the-USA strategy seems tailor made for those goals. But, moving production closer to home requires its own, new checklist for success.
Checklist: Preparing for the Shift in Supply Chain Networks
Here are some areas to keep in mind for the new supply chain era:
- Domestic supply chain networks don’t always eliminate complexity, so make plans to manage your new normal. Instead of consolidated air and ocean movements, ground shipments can mean more vendors, more unsynchronized activity to manage—and more opportunities for waste. We have written before about duplication of lanes, dock congestion, wasted capacity and more.
- Have a strategy to collect and coordinate data across your supplier base. You can’t optimize what you can’t see. So, make sure you have an integrated platform that can track shipments and coordinate movements across suppliers. Thankfully, there are tools that can accomplish this, including our own ChronosCloud. In addition to tracking, consider real-time condition monitoring sensors, which have become much more accessible with the maturing Internet of Things (IoT).
- Review your supply chain network to make sure your procurement processes and transportation are custom-tailored to your needs. A good place to start is by analyzing recent RFPs, which are a great source of information about volumes and pricing. Also, make sure to assess across different business units that share shipment origin and destination locations.
- Domestic manufacturing can help keep inventory levels under control. Instead of waiting for the next ocean shipment to arrive, there’s more likely to be stock on hand to deliver to customers quickly and flexibly. But, don’t let additional inventory optimization opportunities get lost among your company’s supply chain restructuring efforts. The capital required to hold goods is one of a manufacturer’s largest expenses. The best structure for owning goods may be outsourced ownership or inventory financing.
- Above all, ensure that you have a team to actively manage your day-to-day operations and continuous improvement initiatives. Even with today’s artificial intelligence and predictive analytics, software only gets you so far. A control tower needs 24/7/365 human intelligence to realize technology’s full potential.
Morgan custom-tailors transportation networks, control towers and inventory solutions for the world’s most admired manufacturers, including two of Gartner’s Supply Chain Top 25 manufacturing enterprises . If you’re looking for a partner to help you get the most out of a domestic supply chain realignment, we would love to talk.
