May 2024 Volume 6

AUTOMATION

“I look at it strategically,” Almeida says. “If you have a problem in China, where can you go to talk about repair, redesign? Are you going to travel 10,000 miles away? Battle language, equipment and quality barriers?” Meanwhile, another one of NEDCO’s customers made an economic decision to offshore to China when the margins got too tight on an arthroscopic tool for the medical industry. Almeida suggested he could be cost competitive. The customer was skeptical but willing to share the 1,000-piece order and Chinese invoice with NEDCO. Automation Hurdles the Cost and Labor Availability Challenges U.S. suppliers have typically kept the high-mix/ low-volume work and lost the high-volume items to offshore. Through process improve ments, innovation and new equipment, NEDCO was able to create a fixture that produced 30 tools at a time, compared to eight of the Chinese competitors, and produce them at a globally competitive price. NEDCO won the work and has since made over one million parts profitably. In total, work that has been reshored now totals

tool that helps companies account for all relevant factors to compare the true total cost of domestic and offshore sourcing and siting. These factors include overhead, balance sheets, risks, corporate strategies and other external and internal business considerations. The factors Almeida mentioned (quality, travel and ease of communication of engineering and manufacturing) are included. Using this information, companies can better evaluate sourcing, identify alternatives and even make a case when selling against offshore competitors. The impact of using TCO shows that shifting decisions from a price basis to using the free online TCO Estimator can be expected to drive reshoring of 20%-30% of what is now imported. When new processes, technologies and strategies are factored into a reshoring project, companies can amplify resiliency benefits and reduce or even eliminate the offshore cost gap. Learn more about reshoring at IMTS.com/SupplyChain and register now for IMTS 2024, Sept. 9-12, at IMTS.com/Register. Strengthen Manufacturing in North America To learn more about the latest legislation updates and government resources, or how to convince your customers to reshore, contact Amber Thomas, vice president – advocacy at Athomas@AMTon line.org. Article courtesy of The Association for Manufacturing Technology (AMT).

60%-70% of Almeida’s business. Use the Total Cost Metric

Total cost of ownership (TCO) is the best metric to use for compara tive analysis. The Reshoring Initiative’s TCO Estimator is an online

NEED A FORGING PRODUCER?

Visit www.forging.org for information on FIA’s FREE Request for Quotation (RFQ) program.

www.forging.org info@forging.org (216) 781-6260

FIA MAGAZINE | MAY 2024 35