It’s July 4th — Time for a Patriotic Round-Up of Re-Shoring Efforts

Here at Spend Matters, we're about as American as it comes. We hail from different backgrounds, cultures, political persuasions, states and countries. We like to talk straight (and some of us know how to shoot straight, too). About all we have in common as a collective group is a passion for procurement, supply chain and new media. And of course, the love of charred meat (well some of us), apple pie, cold beer and just about all the accouterments of a good July 4th barbecue.

Besides celebrating the birth of America and our independence from that other debtor nation with austerity programs across the pond today, we thought it would be a great time to avoid digging into the usual subjects on Spend Matters and share a few examples of re-shoring. In our view, this is about as patriotic an act as procurement is capable of (which is made even better when it's in the interests of shareholders). So without further ado, here's a list of the top re-shoring stories and background articles that have crossed our desks (and Google News alerts):

Sleek Audio -- Sleek Audio, a "a purveyor of high-end earphones" went to China and then came back from China. Before changing their production and sourcing strategy, the owner and his son were used to making "the long trip every few months to troubleshoot quality flaws" despite the fact "their Chinese partners assured them everything was under control." The situations this family-owned business faced in China are remarkable not because they're outliers, but because anyone involved in Chinese sourcing without two feet always on the ground will immediately relate to similar circumstances they've faced.

GE, NCR and beyond: NCR has already hired about 500 workers to build ATMs and self-service checkout systems at a Columbus, Ga., plant, and it plans to add another 370 jobs by 2014, building products that were formerly produced at plants in China, Hungary and Brazil.

Caterpillar broke ground for a new hydraulic excavator manufacturing facility in Victoria, Texas. Production is anticipated to begin in mid-2010, and once fully operational, the plant is expected to employ more than 500 people and triple the company's U.S.-based excavator capacity ... Among the excavator models the new facility will produce are several currently manufactured in Akashi, Japan, and exported to the U.S.

Why Manufacturers Operating Offshore Must Consider Total Cost of Ownership -- MetalMiner came across the Reshoring Initiative at a recent IMEC supply chain conference here in Chicago, and has separately touched on reshoring in recent articles. We got in touch with the initiative's founder, Harry Moser, to clarify just what his firm does, why total cost of ownership (TCO) matters and why it's important for US metals companies to consider reshoring. Also read: Part 2 and Part 3.

Delta takes promotions and sales calls out of South Africa -- Beginning July 1, 2011, Delta's promotional calls will be routed to US call centers, and by August 2, 2011, all general sales calls will be as well. South African partner Mindpearl will still receive some calls from outside the US, but Delta seeks to implement a new "strategy to reduce outsourcing and bring jobs back" going forward.

Department of Defense needs American IT expertise -- The public sector still remains somewhat wary of "the cloud", but straining budgets and efficiency arguments are beginning to win them over. In terms of tech support, however, the Department of Defense is looking to bring IT expertise to American soil, ensuring higher security -- yet it's complicated. "Newly emerging technologies such as private and hybrid cloud are initially in high demand and require special expertise; thus, they incur above average industry costs," says an expert. "The net result is that the government will continue its drive for insourcing standard IT and will look to the outside experts -- the integrator community -- to fulfill expertise in private and hybrid cloud."

Efficiency wins for Master Lock -- The domestic workers at Master Lock's Milwaukee plant cost six times what they pay for labor in China. But their production speed is 30x faster, which more than makes up for the cost. "I can manufacture combination locks in Milwaukee for less of a cost than I can in China," said Bob Rice, a senior vice president at the largest U.S. padlock manufacturer. Cozy Coupe stays in Ohio. -- According to the Commerce Department, 95% of $23 billion spent on toys were imported from China...in 2007. But Little Tikes, maker of the iconic red and yellow Cozy Coupe that many of us grew up with, churns out 230 products every year that are proudly 100% made in the USA. Of course, the company is always under pressure to cut costs, but managers have done so internally, rather than sending to China, where shipping was cost-prohibitive. A combination of humans and automated robots keep costs low.

And, almost last, a video, below: "You mean we, Americans, now have to make our own cheap plastic crap?"

The Daily Show With Jon Stewart Mon - Thurs 11p / 10c
Wham-O Moves to America
www.thedailyshow.com
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And finally, irony of ironies, our "American pastime" MLB baseballs are still made in Costa Rica...Can't we bring that one home??

Happy 4th!

Jason Busch and Sheena Moore

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