On this week's Industrial Talk Podcast we're talking to Rosemary Coates, Executive Director of the Reshoring Institute about "Bringing Manufacturing back to America". Get the answers to your "Reshoring" questions along with Rosemary's unique insight on the “How” on this Industrial Talk interview!
Finally, get your exclusive free access to the Industrial Academy and a series on “Why You Need To Podcast” for Greater Success in 2021. All links designed for keeping you current in this rapidly changing Industrial Market. Learn! Grow! Enjoy!
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SUMMARY KEYWORDS
manufacturing, reshoring, rosemary, supply chain, people, industrial, china, factories, important, manufacturers, pandemic, companies, business, mexico, create, world, professionals, suppliers, industry, tx
00:00
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01:05
Welcome to the industrial talk podcast with Scott MacKenzie. Scott is a passionate industry professional dedicated to transferring cutting edge industry focused innovations and trends while highlighting the men and women who keep the world moving. So put on your hard hat, grab your work boots, and let's get right you industrial professionals all around the world. Thank you very much for joining industrial talk, the place, the platform, the community, the digital world that celebrates you industrial professionals, you are bold, you're brave, you dare greatly you solve problems, you innovate, you educated, you're doing everything to change people's lives, and therefore change the world. Try to change my mind on that Darya. All right, in the hot seat, we have Rosemary coats, and you're going to end this interview, you're going to realize that she knows more about
01:57
reshoring than you do. And I being the guy that I am. And I love learning and I love just soaking up from professionals like I'm that industrial sponge. She's going to be talking about reshoring manufacturers here in the United States. She's passionate about it. Let's get cracking. Yeah, she is. She is.
02:20
It's great. When you come across somebody that is one smarter than you. Yep. I like surrounding myself with people who are smarter, really just bold, brave and daring greatly. She's bold, brave and daring greatly hang out with her. You got to really change the world. I always say that, right? But anyway, you know, she's she's got some mad street cred out there, you go out to reshoring institute.org. You see what that they're doing? And it's impressive. They have answers. You don't just flip a switch and reassure you've got to create a viable and de important strategy all around that write it and you need people like rosemary and Team reshoring Institute to be able to help you through that before we get into that conversation because I know you're waiting for it. Industrial talk to Dotto is out there. It It not only just highlights great interviews with the best around the world in industry. But it also provides news, because we want to be able to provide a platform that is with no friction go out there get some great news, right? It does real talk. I need some news there. It is fantastic. Also, we also are going to we have an industrial Tuesday news day, right? And that means we're going to be talking about the news. We're going to just it's me, right, and I'm going to expand upon it. And I'm going to ask the tough questions because maybe I just don't know, but they do. People out there industry knows we're going to be talking about the heart, what industry is doing to improve in a positive way communities. We're also going to see things that are in the action. We talk about industry for Dotto, let's see it in action, I want to see it. Let's have a little video out there on that those are going to be out there. Now. The one that gives me all bubbly and warm and fuzzy, is the fact that we've got the industrial Academy, it's a learning management system. It highlights all of the great industrial thinkers out there that are guaranteed that are dedicated to training and learning and teaching. And we're working with an organization down in Uganda. And we're going to be offering that for free. If you buy a membership. I offer it for free down there. It's for free. It's important. That's transformative. They're looking for help. They're looking for insights. They're looking for knowledge, they're ready to educate, they're ready to collaborate, and they are ready to innovate, to help change their lives. Then we have associations and then we have events. And then anything else in between. We're going to be talking about the heart. We're going to be talking about fun stuff we're going to be talking because it is
05:00
Manufacturing, oil and gas, energy utilities. It's fun stuff. And what you're doing out there is incredible. Yeah, I'm trying to remove all the friction to get that information and for you to collaborate so that you are a success going forward. Whoo, am I tired on that one? Let's get cracking on the interview. So, rosemary, of course, she's, she's been down this road for many years. She knows what she's talking about. She has a process. And if you're truly looking to, you know, reassure your business, you need to talk to rosemary, you need to talk to Team reshoring Institute.
05:42
At a minimum, just talk to them, right. They're wonderful people they understand. And, and, quite honestly, you don't have the ability to be able to do it or understand some of the challenges that are taking place, but they do. And they're wonderful people. Anyway, we're gonna have a great conversation. Enjoy, rosemary, rosemary, welcome to industrial Talk. Thank you very much for time, finding time in your busy schedule to talk to the best listeners in the whole wide world. How are you doing? I'm doing great, thank you. Thank you for inviting me. Ah, it's it's all on this side. Man. I'm just telling you, you bring a topic that is near and dear to my heart, but also on the the front of mine with many people within the industrial space. And that is reshoring. Before we get into that conversation, sort of give us a little for one one little background on rosemary and and why you're such an incredible professional.
06:38
Thank you.
06:40
catch you off guard on that one.
06:43
I've been around for a long scar you are you're here to grow. I mean, I look at your stat card out there on LinkedIn. It's impressive. Mine doesn't look that impressive, but yours does. It's impressive. All right, go.
06:57
So, so I've been in the global supply chain manufacturing world for almost 40 years, and was in management consulting a partner in a couple firms for for a while I've been doing consulting for probably 25 years or so. And, and in 2012,
07:20
during the presidential election, both Barack Obama and Mitt Romney were China bashing like crazy. And I had been doing a lot of sourcing and manufacturing in China. And I was helping a lot of clients, close their factories in the US and move their stuff to China. And that's what my that's what my clients wanted. And so I became an expert in doing that. So during the election, there there, China, Brock and minard are China bashing, like crazy. And I'm like, Whoa, man, I can't tell anybody what I do for a living, you know, this is really awful. And that together with just, you know, I started feeling really bad about shutting down these factories and causing these layoffs. I was helping these companies to, to rethink their global factoring and sending things overseas. And so, you know, it really started to get to me. And then about the same time, we had a family reunion, I've got five grandkids, and you know, I'm looking at, I'm thinking, Man, if I keep doing this stuff, they're not gonna have a future. You know, manufacturing is the backbone of America. And we were putting a giant hole in it. So I'm so young gathered my people together. And we developed a methodology for helping clients evaluate how they might be able to bring manufacturing back. So we have a methodology in place. So that's,
08:52
that's a great segue. Right? Okay, let's go through the reshoring Institute. So we we incubated at the University of San Diego for a couple years, and now we're nationwide, we take interns from 15 universities, and do a lot of research and consulting work helping companies bring manufacturing back to America. And you know what, it feels really good. It feels really good. Nobody's bashing you. Now. You're, you're at the top of your game. They're rosemary, top of your game, because I'll tell you a lot of the listeners and a lot of the topics and a lot of the conversations that I've had, especially when the pandemic hit, right, is that whole supply chain, and I've I've spoken to many within the manufacturing space, and and of course, the conversation was oh, I I'm having problems getting my my material and and then that began the conversation of like reshoring onshore and nearshoring whatever. Of these manufactured critical manufacturing's the manufacturers to bring it back into the United States. Why is this so important to you?
10:00
And for our country?
10:03
Well, you know, if you think back a few years, let's say even 20 years, or 40 years ago, manufacturing was 25% of our economy. And today, it's less than 11%. So don't gloss over that step. What did you say? 40%? Now it's down to 11% 11 is a little bit less than 11%. Right, right. And manufacturing is the backbone of the economy, it has the highest
10:34
rate of investment, it has the highest rates of
10:41
how much it contributes to each economy. It's, you know, it's really, really important. I mean, just look what happened in China.
10:50
They're parts of their their economy can be tied to about 80% manufacturing. And over 25 years, they went from like, zero to 60. We know with how, you know,
11:05
because they built on the back of manufacturing. And, you know, unfortunately, we lost during that period. So, you know, what we know is that economically, it's, it's really important to rebuild manufacturing in America. And so, you know, that's what we're trying to help do. So with that said, I mean that. So there are people that are probably listening and saying, gosh, I like what you say. And then rightly so they should, because you are definitely providing a solution, a service, a direction, a roadmap that allows people to do that. And I know that there's a lot of people are wondering how to do it. What are the steps? Can you sort of just give us a little, just, you know, little step by step of what, what me as if I bought a manufacturer that a manufacturer here, but my suppliers are not there? What do I need to do? How do I work with that? That's a really important point as manufacturing went overseas, so did all the suppliers. So you know, supply chains have been moved to Asia, essentially over the past 25 years as well. So you know, the steps are what? Well, let me back up for a minute, because when we talk about reshoring, we're really talking about manufacturing, that comes back from overseas, number one, but it's also about expanding manufacturing here that's already here. It's also about looking at your suppliers and attracting suppliers back to the US. So if you're manufacturing here, you've got to look for suppliers that are here. And we see that building. So that's really important. And it's also about foreign direct investment. So if foreign foreign companies want to build a factory in the US, Toyota, for example, or BMW or, you know, a host of other companies want to invest and build their factories here. That's great for our economy to that is that counts, right. So yeah, when we're when we're trying to go through this, the steps in how to do this, how to raise Sure. We include all of those different factors.
13:10
We help companies with the economic modeling, we sometimes we help them find a factory locations or expand their factories, we do sourcing projects where we help find suppliers in the US. So we do all kinds of consulting work, as well as research. See, it would make sense because let's say I'm manufacturing in Asia someplace. I'm over there. I've been there for years, the infrastructure is there to support me, my supply chain is there. My my feedstock is over there. So when I'm done manufacturing, whatever that widget might be, I just slap it on a container slipping on over, it gets purchased over here. No pain. Okay. And Athan, it's just all done. But if I want to come back over here, I have to be cognitive of my supply chain. Right? I need that bolt. But I get that bolt over there. And it's still sort of in a supply chain is sort of in a weakened state. Am I looking at that? Right? Yeah, that's a great way to put it, it is indeed a weakened state. And you know, as I said, when when manufacturing moved overseas, all the suppliers moved overseas as well. So you can't just rip out manufacturing from China or Malaysia or Vietnam, and establish it in the US and expect to have suppliers here too. So we help companies rebuild that supply base as well. You know, there's a lot of issues around labeling also. So, you know, people would companies would love to label their products made in the USA. Yeah, but there are there FTC, US Customs and TAA requirements that are all regarding labeling where and so that's why you see a lot of products that say assembled in the USA, and that means that they have brought products or parts or
15:00
Or sub assemblies from overseas and put them together in the US, which is good. I mean, it's a step in the right direction. But we'd much rather have everything sourced in the US not not just from overseas. So that would be an ideal state, right? I don't say it's all back over here, we're having a good time we're manufacturing, we've got the supply chain. But that's just not going to, is there a sort of a balance between the necessity to bring some of the manufacturer and then also leveraging other foreign,
15:31
you know, suppliers to help sort of solve the solution? Is there sort of a balance there?
15:38
That's, that's exactly right. So we even though we're called the reshoring Institute, we really think of it as global manufacturing strategy. And by that, I mean, keeping manufacturing in the local area, the...
Transcripts
00:00
-:
01:05
Welcome to the industrial talk podcast with Scott MacKenzie. Scott is a passionate industry professional dedicated to transferring cutting edge industry focused innovations and trends while highlighting the men and women who keep the world moving. So put on your hard hat, grab your work boots, and let's get right you industrial professionals all around the world. Thank you very much for joining industrial talk, the place, the platform, the community, the digital world that celebrates you industrial professionals, you are bold, you're brave, you dare greatly you solve problems, you innovate, you educated, you're doing everything to change people's lives, and therefore change the world. Try to change my mind on that Darya. All right, in the hot seat, we have Rosemary coats, and you're going to end this interview, you're going to realize that she knows more about
01:57
reshoring than you do. And I being the guy that I am. And I love learning and I love just soaking up from professionals like I'm that industrial sponge. She's going to be talking about reshoring manufacturers here in the United States. She's passionate about it. Let's get cracking. Yeah, she is. She is.
02:20
It's great. When you come across somebody that is one smarter than you. Yep. I like surrounding myself with people who are smarter, really just bold, brave and daring greatly. She's bold, brave and daring greatly hang out with her. You got to really change the world. I always say that, right? But anyway, you know, she's she's got some mad street cred out there, you go out to reshoring institute.org. You see what that they're doing? And it's impressive. They have answers. You don't just flip a switch and reassure you've got to create a viable and de important strategy all around that write it and you need people like rosemary and Team reshoring Institute to be able to help you through that before we get into that conversation because I know you're waiting for it. Industrial talk to Dotto is out there. It It not only just highlights great interviews with the best around the world in industry. But it also provides news, because we want to be able to provide a platform that is with no friction go out there get some great news, right? It does real talk. I need some news there. It is fantastic. Also, we also are going to we have an industrial Tuesday news day, right? And that means we're going to be talking about the news. We're going to just it's me, right, and I'm going to expand upon it. And I'm going to ask the tough questions because maybe I just don't know, but they do. People out there industry knows we're going to be talking about the heart, what industry is doing to improve in a positive way communities. We're also going to see things that are in the action. We talk about industry for Dotto, let's see it in action, I want to see it. Let's have a little video out there on that those are going to be out there. Now. The one that gives me all bubbly and warm and fuzzy, is the fact that we've got the industrial Academy, it's a learning management system. It highlights all of the great industrial thinkers out there that are guaranteed that are dedicated to training and learning and teaching. And we're working with an organization down in Uganda. And we're going to be offering that for free. If you buy a membership. I offer it for free down there. It's for free. It's important. That's transformative. They're looking for help. They're looking for insights. They're looking for knowledge, they're ready to educate, they're ready to collaborate, and they are ready to innovate, to help change their lives. Then we have associations and then we have events. And then anything else in between. We're going to be talking about the heart. We're going to be talking about fun stuff we're going to be talking because it is
05:00
Manufacturing, oil and gas, energy utilities. It's fun stuff. And what you're doing out there is incredible. Yeah, I'm trying to remove all the friction to get that information and for you to collaborate so that you are a success going forward. Whoo, am I tired on that one? Let's get cracking on the interview. So, rosemary, of course, she's, she's been down this road for many years. She knows what she's talking about. She has a process. And if you're truly looking to, you know, reassure your business, you need to talk to rosemary, you need to talk to Team reshoring Institute.
05:42
At a minimum, just talk to them, right. They're wonderful people they understand. And, and, quite honestly, you don't have the ability to be able to do it or understand some of the challenges that are taking place, but they do. And they're wonderful people. Anyway, we're gonna have a great conversation. Enjoy, rosemary, rosemary, welcome to industrial Talk. Thank you very much for time, finding time in your busy schedule to talk to the best listeners in the whole wide world. How are you doing? I'm doing great, thank you. Thank you for inviting me. Ah, it's it's all on this side. Man. I'm just telling you, you bring a topic that is near and dear to my heart, but also on the the front of mine with many people within the industrial space. And that is reshoring. Before we get into that conversation, sort of give us a little for one one little background on rosemary and and why you're such an incredible professional.
06:38
Thank you.
06:40
catch you off guard on that one.
06:43
I've been around for a long scar you are you're here to grow. I mean, I look at your stat card out there on LinkedIn. It's impressive. Mine doesn't look that impressive, but yours does. It's impressive. All right, go.
06:57
years or so. And, and in:
07:20
during the presidential election, both Barack Obama and Mitt Romney were China bashing like crazy. And I had been doing a lot of sourcing and manufacturing in China. And I was helping a lot of clients, close their factories in the US and move their stuff to China. And that's what my that's what my clients wanted. And so I became an expert in doing that. So during the election, there there, China, Brock and minard are China bashing, like crazy. And I'm like, Whoa, man, I can't tell anybody what I do for a living, you know, this is really awful. And that together with just, you know, I started feeling really bad about shutting down these factories and causing these layoffs. I was helping these companies to, to rethink their global factoring and sending things overseas. And so, you know, it really started to get to me. And then about the same time, we had a family reunion, I've got five grandkids, and you know, I'm looking at, I'm thinking, Man, if I keep doing this stuff, they're not gonna have a future. You know, manufacturing is the backbone of America. And we were putting a giant hole in it. So I'm so young gathered my people together. And we developed a methodology for helping clients evaluate how they might be able to bring manufacturing back. So we have a methodology in place. So that's,
08:52
that's a great segue. Right? Okay, let's go through the reshoring Institute. So we we incubated at the University of San Diego for a couple years, and now we're nationwide, we take interns from 15 universities, and do a lot of research and consulting work helping companies bring manufacturing back to America. And you know what, it feels really good. It feels really good. Nobody's bashing you. Now. You're, you're at the top of your game. They're rosemary, top of your game, because I'll tell you a lot of the listeners and a lot of the topics and a lot of the conversations that I've had, especially when the pandemic hit, right, is that whole supply chain, and I've I've spoken to many within the manufacturing space, and and of course, the conversation was oh, I I'm having problems getting my my material and and then that began the conversation of like reshoring onshore and nearshoring whatever. Of these manufactured critical manufacturing's the manufacturers to bring it back into the United States. Why is this so important to you?
10:00
And for our country?
10:03
Well, you know, if you think back a few years, let's say even 20 years, or 40 years ago, manufacturing was 25% of our economy. And today, it's less than 11%. So don't gloss over that step. What did you say? 40%? Now it's down to 11% 11 is a little bit less than 11%. Right, right. And manufacturing is the backbone of the economy, it has the highest
10:34
rate of investment, it has the highest rates of
10:41
how much it contributes to each economy. It's, you know, it's really, really important. I mean, just look what happened in China.
10:50
They're parts of their their economy can be tied to about 80% manufacturing. And over 25 years, they went from like, zero to 60. We know with how, you know,
11:05
because they built on the back of manufacturing. And, you know, unfortunately, we lost during that period. So, you know, what we know is that economically, it's, it's really important to rebuild manufacturing in America. And so, you know, that's what we're trying to help do. So with that said, I mean that. So there are people that are probably listening and saying, gosh, I like what you say. And then rightly so they should, because you are definitely providing a solution, a service, a direction, a roadmap that allows people to do that. And I know that there's a lot of people are wondering how to do it. What are the steps? Can you sort of just give us a little, just, you know, little step by step of what, what me as if I bought a manufacturer that a manufacturer here, but my suppliers are not there? What do I need to do? How do I work with that? That's a really important point as manufacturing went overseas, so did all the suppliers. So you know, supply chains have been moved to Asia, essentially over the past 25 years as well. So you know, the steps are what? Well, let me back up for a minute, because when we talk about reshoring, we're really talking about manufacturing, that comes back from overseas, number one, but it's also about expanding manufacturing here that's already here. It's also about looking at your suppliers and attracting suppliers back to the US. So if you're manufacturing here, you've got to look for suppliers that are here. And we see that building. So that's really important. And it's also about foreign direct investment. So if foreign foreign companies want to build a factory in the US, Toyota, for example, or BMW or, you know, a host of other companies want to invest and build their factories here. That's great for our economy to that is that counts, right. So yeah, when we're when we're trying to go through this, the steps in how to do this, how to raise Sure. We include all of those different factors.
13:10
We help companies with the economic modeling, we sometimes we help them find a factory locations or expand their factories, we do sourcing projects where we help find suppliers in the US. So we do all kinds of consulting work, as well as research. See, it would make sense because let's say I'm manufacturing in Asia someplace. I'm over there. I've been there for years, the infrastructure is there to support me, my supply chain is there. My my feedstock is over there. So when I'm done manufacturing, whatever that widget might be, I just slap it on a container slipping on over, it gets purchased over here. No pain. Okay. And Athan, it's just all done. But if I want to come back over here, I have to be cognitive of my supply chain. Right? I need that bolt. But I get that bolt over there. And it's still sort of in a supply chain is sort of in a weakened state. Am I looking at that? Right? Yeah, that's a great way to put it, it is indeed a weakened state. And you know, as I said, when when manufacturing moved overseas, all the suppliers moved overseas as well. So you can't just rip out manufacturing from China or Malaysia or Vietnam, and establish it in the US and expect to have suppliers here too. So we help companies rebuild that supply base as well. You know, there's a lot of issues around labeling also. So, you know, people would companies would love to label their products made in the USA. Yeah, but there are there FTC, US Customs and TAA requirements that are all regarding labeling where and so that's why you see a lot of products that say assembled in the USA, and that means that they have brought products or parts or
15:00
Or sub assemblies from overseas and put them together in the US, which is good. I mean, it's a step in the right direction. But we'd much rather have everything sourced in the US not not just from overseas. So that would be an ideal state, right? I don't say it's all back over here, we're having a good time we're manufacturing, we've got the supply chain. But that's just not going to, is there a sort of a balance between the necessity to bring some of the manufacturer and then also leveraging other foreign,
15:31
you know, suppliers to help sort of solve the solution? Is there sort of a balance there?
15:38
That's, that's exactly right. So we even though we're called the reshoring Institute, we really think of it as global manufacturing strategy. And by that, I mean, keeping manufacturing in the local area, the region, that's going to serve people there. So for example,
15:59
the Chinese economy is growing, you know, around 8% or so, it has some ups and downs with a pandemic. But on average, if you looked at it long term, you'd say seven to 8%, is probably a good percent of that. So that's an enormous growth.
16:16
Like, then you're thrown out some stats that are just sort of tongue drop type of like, yeah, so if, if it's growing at that percentage, that's gonna be your target market and your growth market in the future. So you don't want to shoot yourself in the foot and say, Well, you know, we're going to just manufacturer in America, you need to probably keep some manufacturing in Asia, as well, as you may consider Mexico or Europe, Eastern Europe, perhaps, yeah. You know, places where you can manufacture and serve those local markets. And so we think of this as a global strategy, where to put your your factories and so forth. And I have to interrupt when you do that, when you look at that global model, are you taking into consideration a resiliency, like, you know, pre pandemic gets hit by pandemic, everybody, everybody global, gets hammered? Right? Are we looking at it also from the perspective of resiliency, like, Hey, this is the right strategy, it might cost you a little bit more, but you've got resiliency. Yeah, you know,
17:25
ow, the the Tax Reform Act of:
17:55
because it introduced risk into global supply chains. All of a sudden, now you're you have a different perspective, manufacturers are thinking about risk and you know, telling stories about how they couldn't get supplies during the pandemic and so forth. So yeah, the attitudes have definitely shifted. Yeah, and it's interesting when you bring it down, pre pandemic, I'd go to the store, I get my stuff I come back during the pandemic I go to the store the shelf certain not fall, I can't get certain things and all of a sudden that consumer Joe sixpack here is having a dark time. And I'm now I'm a supply chain expert. And I know it's important.
18:40
So funny, cuz I used to have to explain all the time what I did for a living and what supply chain was now everybody talks about the supply chain is kind of the buzzword right? It is it's along the same lines as COVID supply chain, like yeah, I know about that. All of a sudden I graduate it really exposed like you were saying some vulnerabilities in our supply chains to like, you know, I was so frustrated I couldn't get Clorox wipes or Lysol wipes for like nine months and come on you know, it's a simple project it product it's us it's a plastic tube that a little bit of Clorox in it and some paper towels right? But yet yet these companies were unable to fill the demand, right even with contract manufacturing and so forth. It just was a complete basic breakdown of supply chain so frustrating to me by chain professionals so what's interesting is I didn't realize how fragile it was. I knew infinite supply chain was but I didn't realize how just fragile it's like to one day we're fine next day it's like okay, all Hell's breaking loose. I can't find anything. And it was just a matter of overnight ago. Wow. That was that's a data doily. And not just not just consumers, but life you take like 100
20:00
In Korea,
20:02
the automotive center in China's Wuhan. So it's like the Detroit of China, so on is where all this automotive stuff was coming from. And because so many companies were practicing lean and had practically no inventory, and you know, just making sure that pipeline was moving along, when wilcon shut down. It caused an instant tension though supply chain, so Hyundai in Korea couldn't get parts, and they shut down their production line within a week, one week. I mean, it was astonishing how much how much effect it had on manufacturers around the world. I saw it. I want to say a video some something that was out there. What was interesting is that how people are reevaluating that just in time inventory strategy, there are times when you use it, right. And then there's times when you just say, these are critical parts, I've got to have inventory, just bite the bullet carry that inventory. And that's more of a reason, a more reasonable approach to your inventory and your inventory management. Just because not everything can be just in time, maybe, you know, polycarbonate where there's a gazillion manufacturers. But your chips. No, you can't just do that. You can't just have Justin time on that one. Let me ask you.
21:27
We're certainly experiencing shortages and chips these days, right, semiconductors are in short supply around the world.
21:35
Who would have known? I mean, I just come on, it's like, Really? You can't get Yeah, that's you know, that's funny, because I live in Silicon Valley. And I've been friends in the computer industry. And, you know, there were there were like instant shortages. And it never occurred to me that you know, what was going on until I was talking to a friend. He's like, you know, there's so many people buying computers, laptops for their kids for school, or work at home, or that kind of thing. And he said, we cannot keep up with demand. He said
22:09
it was everything. Okay? It's just amazing. It really is. Now, when we start talking about reshoring, do you? Do you look at the the resource base, let's say, I want to bring up a boat, man, you simplify. And trust me, I'm sure it's far more complicated. But I'm, I'm a simple guy, bringing in a boat manufacturer, and let's let's do a reshoring project. But I'm not just going to stick it out in the middle of the Mojave Desert where there's nobody that lives there, you've got to find the right resource base, right, that has sort of some skills, some ability to be able to do that. Right.
22:45
So this is a complex problem for sure. So first, yeah. So for example, you may, you may have
22:57
bolts, which are hopefully you can automate that and extract labor costs out of out of the cost, because the cost structure is really important. And you know, we don't want the 23 cent an hour t shirt production back in America, because it does not pay a living wage. And if we don't pay a living wage, we have to supplement those people's income with welfare. So we don't want to create a welfare state, right. So a lot of viable options. What we want are the higher skilled, higher paying jobs to come back and through automation. So we want the people who run the robots, not who put, you know, pegs in holes, we want them we want the people with the skills that run the robots that put pegs in in holes. And that's a different skill set. It's more different training, and it pays better. So that's where we're aiming for economically, that's the right ladder to climb. And so I think I went off on a tangent No, no, that's exactly correct. And I like that and it's it's specially with this push for digitization, this desire to provide the industry for Dotto solution in manufacturing and all at all, every year. It's a it's it's a skilled
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trade, that requires tremendous training. But
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if you do it, you invest today, it reaps benefits, because that is something that is needed for the future. And again, we talk resilience, we talk about the durability of businesses, and innovation and that type of approach as well. Yeah, I think, you know, you know, I think people understand that, especially in manufacturing that you have to move towards digitization.
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It's tough.
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And, um, you know, and I think there's a fundamental understanding about that. There's there's no question about that. Yeah.
25:00
Do some risk though. And
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in the other half of my work day, I do legal work. I'm an expert witness for, primarily for Chinese imports, lawsuits and global manufacturing lawsuits.
25:17
And when you move towards digitizing your information, right, now you're creating evidence. So it's a great idea to interface with other companies to send forecasts and production results back and forth. And, you know, connecting those ways connect all the machines on your shop, floor, all of that, as well, as you know, improving your machinery and all that sort of thing. Like, keep in mind, every time you create a record, you have evidence, and in, you know, some
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some of the lawsuits, you know, I've coached the the attorneys to go and ask for certain
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digital information, look at the systems, that sort of thing. And, you know, companies are dumbfounded, saying, I didn't know we had that information, and oh, now it points to us, right? Yeah, it's all out there. And it's been out there, we've just never mind the data. It's now we're trying to extract the gold, real gold, to be able to create a business that has some, you know, longevity, whatever, whatever the objective is, with that data to make better decisions. It's always been out there, they're just, they're just for grad. Okay, so, go ahead. And I think that, you know, we talk so much about industry 4.0 and automation, and something that will just great and needed and the way we look at the economics of it, no question about that. But don't forget the other side, right? I mean, you got to make a balanced decision between risk and and, you know, benefits that you are looking at with, with respect to automation. So, this is great. This is important. I agree with you. I think just like everything else, it's not an all or nothing proposition. It's something in the middle where you can create a solution that would gives you the resiliency you want that supply chain, a strongest supply chain, whatever it might be. And I think you can achieve that objective. What are the biggest push backs from just saying, hey, yeah, I hear what Rosemary said. But I don't want to do it. What is it?
27:29
Well, you know, businesses are economic entities, and they're always focused on cost. I mean, you need to, you know, every aspect of a business is about costs, the cost of labor, the cost of new projects, the cost of investment in machinery, I mean, that's fundamental to the way business operates. But what we're seeing emerging is also this thing called the politics of economics. And yeah, we're seeing a preference for for consumers and industrial buyers, to look for products that are made in the USA. In fact, we did a survey
28:10
last fall. And we surveyed 500 people across America, and they were all walks of life, all education levels, high school degrees, all the way up through PhDs, all regions of the country, all age groups, we had a 18 year old all the way up to a guy that was almost 90. And we asked them, Do you prefer products that are made in the USA? And so we had, you know, statistically about 80% said, Yes. Which didn't surprise us. I mean, nothing really surprised to say, No, I,
28:48
then we asked, okay, and would you pay more for those products? And, you know, we got a slightly less responses said, yes, they would. And then we asked, how much would you pay? How much more would you pay? And the response was between 10 and 20% 80% of the people responded said they'd pay between 10 and 20% more, including the industrial buyers. So we use that statistic that 50, about 15% more that people are willing to pay for goods made in America as part of the weighting factors when we evaluate reshoring. So if you can get your costs to within about 15% of say, the China cost, right, and that's including everything and production, the labor, the lab, whatever it is, yeah, right into a total cost of ownership model or GCL model. And if we can get that within 15%. We have a winner. You know, we know that Americans are willing to pay more, and then that now is being supported by the policies of the of the Biden administration, where there is
30:00
I'm working hard to support
30:03
the government buying products that are made
30:07
in a much greater extent than it's been in the past 25 years. I mean, this is all great. And I hear what you're saying. And I think that there, it's all possible, you just, the one thing you need is, is you need a team on your side to make these decisions. Yeah, I don't think it's a prudent business decision to think that you can do it on your own, you need, you need to understand there's a lot of regulations, a lot of incentives, and lot of this and a lot of that. And, you know, from a business perspective, I'll stay in my lane, I do what I need to do, but I think this is a great conversation to have now. Secondly, is Mexico, a viable option.
30:53
And it's interesting that you say that, we, I discovered, kind of stumbled onto it, because because I have so much background in China, I watch a lot of the things that are happening in China. And I stumbled on an article that was talking about investment in factories at the border.
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So you know, being the being the curious person that I am a supply chain professional, that you are
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one of my interns down to the border at otay. Mesa, which is the commercial crossing in San Diego. And we spent the day there, just you know, looking around and touring around, and I had a tour guide that knows the border really well. And factory after factory after factories being built on the Mexico side. And, you know, kind of a majority of them appear to be financed by China. So what China
31:51
has figured out is if they invest in factories in Mexico, they can make use of usmca and bring products that are manufactured into Mexico into the US without duty without paraphrase. And what we're seeing this huge boom along the border, both construction and factories along the border on the Mexico side, and on the US side, a huge amount of
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construction and development for services that are required. So customs brokers, for example, warehouses, trucking operations, I mean, it was just jaw dropping, how much construction there was on both sides.
32:36
And trucks for as far as you could see, there were just trucks waiting to get across the border in the UK, it's a commercial crossing. So that means people that go across this trucks. But but it was astonishing. And we actually wrote a case study about it. It's on our web, our website under the research tab, white paper called boom at the border. Yeah.
33:01
Yeah, it is. I know that the the the thing that I got out of that, just to that statement, I didn't realize it's very business is very,
33:12
very, they know that, you know, the it's just it's hard to put in place, whatever it is. And so I got me, where are you saying China's just helped financing this? So they they see it? And maybe there's gonna be a reduction in China, but doesn't matter. We're over here. And we'll take advantage of some of the favorable tariffs that exist over there. Yeah. Make sense? I think a lot of us companies are considering Mexico as well, if they need a lower cost environment, or they have a high touch manufacturing site where you have a lot of labor. Yeah, you got to look to other other communities. Because in the US, I mean, we just we can't, we can't do the 23 cent an hour t shirt production. Yeah, we can't. You're absolutely right. We're gonna have to wrap this up.
33:57
No, I'm sorry, dad. I mean, I didn't mean to walk on you. I'm sorry about that. What were you gonna say? No, I just, it's not appropriate to bring that kind of manufacturing back to us. So you look at a low cost environment, especially like the interior in Mexico. And we did a study
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comparing labor rates and actually in the interior of Mexico, the labor rates are comparable to China. So you can get a low cost low.
34:25
In Mexico, if you have a high touch manufacturing, you need a lot of people. You know, it's a great place to to locate and then you have access directly to North American markets. I think what I hear you saying Rosemary that there is, there are options out there. And I think that reshoring is an important decision. If you're a manufacturer and you're looking to try to get back here in the United States, or build up that supply chain or whatever it might be. I think that what I hear from you is that there are options. You're not you're not you just can't sit
35:00
to shrug your shoulders and say that it's not going to work? Because there are no, you know, clearly, I mean, this is just for me looking back. I used to help companies because, you know, the executive would say, we want to move to China, our competitors are there, we know, it's cheaper. And they would just do it without all that much analytical process, you know, determining what the real cost was going to be. I mean, you might look at labor costs. But you know, keep in mind, you also have to travel there, you know, you have communication. Yeah. Who's right? But yeah, these executives would say, because I was the consultant to go to right. It's okay, we want to go there, you know, we want to manufacture there help us set up operations in China, which I did for 15 years.
35:53
When now though, you know, the thing to remember about the us is that we can now make an economic case, when you look at the total cost of ownership. And we do have options, say Mexico, for example. Of course, the problem with Mexico is, it's not America.
36:12
That's true, it's settled. And we want to build manufacturing in America. So we always want to choose the US is the first the first area that we examine. If you can create an economic model that makes sense to put people to work in the United States, I believe that that's the best option. But I believe, too, is that once again, there is a necessity to balance this all out. Right? there are strategies that that'll help you as a, you know, let's say a small to midsize manufacturer to be more resilient. And I think that's what you bring to the table with the, with your organization. Yeah, I think, you know, we, before you had you had mentioned, you know, looking at things differently, and over the last 25 years, there was not as much sophistication as I would see today. I mean, today, when we're looking at evaluating these opportunities, the models are more sophisticated, executives are thinking more analytically. There's a more thoughtful approach to, to global supply chains. I mean, these are things that 25 years ago,
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just didn't exist, you know, there just wasn't that kind of, there was not that kind of,
37:33
you know, thoughtfulness and and analysis going into it, but you know, the world is, secularists have gotten smarter, I'm sure. You know, purchasing people do Yeah, yeah, you got you got better insights. You we've been doing it for many, many years. There's and and people like you and your organization, reshoring. Institute, clearly, now the finger is right on the pole. So it's this is just such an important topic. Bottom line, and listen to me manufacturers out there. But I want my shelves to be full. And that means you got to start manufacturing here in the United States.
38:12
It's all about me.
38:14
It's about me, rosemary.
38:17
You can join me join me for the ride, but I want my shelves full.
38:23
Alright, how do people get ahold of you Rosemary?
38:27
Well, first of all, I would encourage everybody to go to our website, it's reshoring institute.org. We're a nonprofit and nonpartisan organization. And we publish everything that we do on our website. And you can also check out our interns. We've had I think 29 interns over the past few years, from all kinds of universities and they're fun to look at.
38:52
I looked at it I said, Yep. You know, bright shiny faces ready to conquer the world. Right on insert for all graduate students. Well, for the most part graduate students and in business and engineering, so they're there like, some of them were really scary, smart. You know, we love working with our insurance. And then for me personally, you can email me at our, our coats. So our c OAT s at reshoring institute.org. See, easy peasy listeners out there. Rosemary, you are absolutely spectacular. Love the conversation in a big way.
39:35
Thank you for having me. I appreciate it. I'm always willing to talk about reshoring Yeah, absolutely. All right, listeners. You're going to have all the contact information, you know, on her podcast, on her landing page at industrial talk, and we're gonna wrap it up on the inside. Do not go away. You're listening to the industrial talk Podcast Network.
40:00
Yeah, what did I tell you? Mad street credit mad skills? That stat card out there, Rosemary? Yeah, she's the real deal. You've got to reach out to her all the information is going to be out on industrial talk, fighter podcast, listen to it again. It doesn't matter. We've got some great resources for you to take in and get moving with this at least have that conversation because you won't be disappointed with that. They just get to know her man. She's a great person. All right, industrial talk to Dotto. I've heard I've talked about it, we're removing the friction for you to get the information that you need. We're going to be promoting people. We're going to be doing everything we can to make you you know, survive, rebuild, definitely prosper. We need you and we need to be able to tell your story. Contact me get on industrial talk. Alright, be bold, be brave, Daring Greatly hang out with people like rosemary that's bold, brave and daring greatly and you know what you're gonna do?
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change the world. That's what you're all about. Alright, we're gonna have another great interview shortly. So stay tuned.
