May / June 2022 MiMfg Magazine 15 of the pandemic but managing the economic realities of onshoring will be challenging in a highly costfocused environment like manufacturing .
“ Every time something like this happens , we hear people say , ‘ We should be building onshore ,’ and we start to move some of it back ,” Smith says . “ But , over time , cost structures push things in certain directions . I anticipate that , as a result of this most current supply chain disruption caused by COVID-19 , there will be more products built here and that will probably last for a while , but it will remain fluid over time .”
The rapid growth of the electric vehicle market will be a good litmus test for applying new solutions to traditional supply chain economics .
“ When considering onshoring a product , manufacturers have to consider many things : Are the materials available ? What is the cost of onshoring this product ? What are the logistics risks ? And , at the end of it , what are the costs of doing it versus not doing it ?” says Smith .
The idea of onshoring has been historically challenging , particularly in automotive . Manufacturing a vehicle is expensive , and yet costs to purchase a vehicle are not always permitted to rise at the same rate
What we are doing is advocating for electronics manufacturing and being a light for the industry saying , ‘ We can do this in America . We must rebuild the U . S . electronics manufacturing ecosystem .’
— Meredith LaBeau • Calumet Electronics
as production costs , says Smith . This has chief engineers on vehicle platforms fighting over as little as a 5- cent expense variance between suppliers ’ products .
That being said , Smith does believe there is a great opportunity for change and new thinking given the current environment .
“ I think there is an opportunity for change but it will take time ,” Smith says . “ I believe that the men and women who run manufacturing supply chains and the suppliers are really , really good at what they do . They will get even better , and they will have a better understanding moving forward .”
He adds , “ It ’ s still going to be a challenge to prepare for the next big event in an industry that experiences such cost pressure .”