August 2020 Volume 2

ASSOCIATION NEWS

Reshoring Now! COVID-19 Supply Chain Wake-up Call By FIA Staff

FIA recently arranged a member-only webinar on reshoring (June 11). In recent months, we’ve tracked a sizeable increase in internet searches for the keywords “forged parts” and “reshoring.” Our own “Request for Quotation” (RFQ) inquiries on the FIA website have spiked up. On the surface, it would appear North American forgers can expect, at a minimum, more opportunities to quote for new business or re-quote for business lost to overseas competitors. This begs the question: despite the COVID-19 virus disrupting supply chains (which, it can be argued, is temporary)—what has really changed? North American forgers have lost market share over the

decades to those selling forgings at or near the raw material cost a North American forger would pay. FIA continues to advocate for fair trade and encourages members to fight for legal remedies available to us to fight unfair foreign pricing (anti-dumping (AD)) and government subsidies (counter-vailing/ CVD). Beyond fighting for fair trade, what else can a forger do to compete? Enter the Reshoring Initiative. Understanding everything we can do to win business back fair and square was the intent of our webinar attended by nearly 100 members.

Reasons Cited for Why Offshore Work Returns

Rank

Negative Reasons Offshore

# of times cited

1 Quality/rework/warranty

292 196 147 100

2 Freight cost 3 Total cost 4 Delivery 5 Inventory 6 Rising wages

91 88 78 64 61 53

7 Supply chain interruption risk/Natural disaster risk/Political instability

Source: Reshoring InitiativeLibrary, December 2017 . 10 Green Considerations 8 Intellectual property risk 9 Communications

To quote our presenter, Harry Moser, President of the Reshoring Initiative, the key is to focus on total cost of ownership: “Most companies make sourcing decisions based solely on price, oftentimes resulting in a 20 to 30 percent miscalculation of actual offshoring costs. The Total Cost of Ownership (TCO) Estimator© is a free online tool that helps companies account for all relevant factors—overhead, balance sheet, risks, corporate strategy, and other external and internal business considerations—to determine the true total cost of ownership. Using this information, companies can better evaluate sourcing, identify alternatives, and even make a case when selling against offshore competitors.” The Reshoring Institute has put together an entire online library where you will find articles on published cases of reshoring, foreign

direct investment, and products kept from offshoring: https:// reshorenow.org/main-reshoring-library/. Also visit the Library of Related Categories, https://reshorenow.org/library-of-related categories/, which includes articles on consumer preference, economic impacts, green policies, how to reshore; reshoring surveys, and risks of offshoring. The entire June 11 webinar recording is available for members only at https://www.forging.org/member-services/fia-webinars. ■

FIA MAGAZINE | AUGUST 2020 50