Skip to main content

The Reshoring Movement and its Impact on U.S. Manufacturing

Published Feb 24, 2021 by A.J. Mistretta

manufacturing.JPG

The COVID-19 pandemic has exposed many vulnerabilities for American business, from the critical importance of remote connectivity to the risks of open office design. But for manufacturers and others dependent on the global supply chain, the pandemic brought their exposure into stark focus when parts of the chain broke down last spring. Companies dependent on materials and supplies from China and other nations were left waiting weeks or more for those products in many cases. 

Acknowledging the risk, a number of U.S. companies are looking to “reshore” parts of their own operations and seek out domestic producers for critical supplies. These businesses hope to strengthen their supply chain by reducing its length. 

Experts came together to discuss the reshoring phenomenon and the advantages to businesses looking to supply the federal government in a special Business Beyond Borders presentation this week hosted by the Partnership. The conversation resumes with a Part 2 on Reshoring on March 2. Register here.

Dr. Sanju Patro, Director of TMAC Gulf Coast and Harry Moser, President of Reshoring Initiative, talked about the growing movement toward domestic production. 

The Buy American Act requires that the federal government buy products made in the U.S. from materials mostly supplied domestically. But loopholes and ambiguity surrounding the law often make it easy to circumvent. Patro said a recent executive order from the Biden Administration seeks to close those loopholes and directs federal agencies to review their procurement process. That’s creating renewed incentive for American companies to source and manufacture domestically, which could boost employment. 

“As more and more U.S. companies work to reshore manufacturing, there will be greater demand for skilled labor,” Patro said. 

Moser said the pandemic has brought to light many of the hidden costs of outsourcing. While many companies source and manufacture overseas, they aren’t factoring in the “total cost of ownership,” or the additional costs tied to the supply chain. 

Over the last 20 years, the value of U.S. manufacturing has plateaued due in large part to offshoring. “We are consuming more goods than ever before, but we simply aren’t producing them anymore,” said Moser. 

Moser offered an example many have become familiar with during the pandemic. Disposable masks are largely manufactured overseas and at the beginning of the pandemic, these were in short supply due to the breakdown in the supply chain. According to Moser, if mask making had been done domestically it would have created 180,000 additional manufacturing jobs. 

To watch the full program Business Beyond Borders: COVID-19 Supply Chain Wake-Up Calls for Reshoring Now, Partnership members can log into the membership portal via the link at the top right of the page. 

Related News

COVID-19

Houston Experts Lay Out 9 Key Elements for Safe Return-to-Work Plans

4/15/21
As more Houston companies consider bringing employees back to the workplace, experts say there are a number of critical factors to consider to ensure reopening plans are both safe and legally compliant.  The Greater Houston Partnership hosted Dr. Carl Vartian, Chief Medical Officer of HCA Houston Healthcare Clear Lake, and Tom Wilson, Partner at Vinson & Elkins, for a conversation about best practices for employers. The webinar held on April 15 is part of the Partnership's Restart Houston series. Here are the highlights from the virtual event.  Top 4 Safety Recommendations From Dr. Vartian Enable basic hand hygiene: Employers need to have a way for people to wash their hands. Also, for disinfecting surfaces, Dr. Vartian said using regular detergent and water is all you need, according to the CDC. Create a socially distanced environment: Guidelines on this are still in place and individuals should continue practicing social distancing with others, maintaining six feet where possible.  Process of identification and isolation of sick employees: Evaluate how you screen your employees before they come to work and what procedures you have in place for sick workers. Communicate to employees that they should not be in the workplace if they exhibit any COVID-19 symptoms.   Workplace controls and mitigation: Think about your workplace setup. Can employees continue working remotely? Can you stagger shifts to help mitigate the number of employees in the workplace? Top 5 Best Practices for Workplace Procedures from Tom Wilson Appoint a point person: Assign someone who is ultimately responsible for your return-to-work program. “This needs to be a point person who is overseeing the program itself and is the face of the program. That’s very important,” said Wilson. Conduct a hazard assessment: Do a hazard assessment and mitigate those hazards before you bring employees back. Take a look at your workplace and consider how your employees interact. When does that happen and when does it need to happen?  Mitigation protocol: How do you deal with a situation or element of your workplace that could pose a safety issue? Consider measures such as implementing barriers in between desks or alternating work schedules so there aren't as many employees in the workplace at one time. Inform managers and supervisors of protocols: Inform your managers and supervisors what your return-to-work plan is before you roll it out to all staff. When you want your leaders to communicate or enforce the program and they're uncertain of details, that can cause problems on how to communicate - and enforce - procedures. Establish a clear communication plan: Consider how you roll out the return plan to your employees. Be sure to follow up with employees by calling them. Ask if they have any questions about the plan. This is so that employees know exactly what to expect when they physically return to the workplace.  Implications of the COVID-19 Vaccine in the Workplace Wilson said one of the main legal issues surrounding return-to-work plans is whether an employer can mandate or require employees to be vaccinated before returning to the workplace. He said yes, they can. The question is whether they should.  There may be employees who say they have a health condition that prohibits them from getting vaccinated, which falls under the Americans with Disabilities Act (ADA). Or, you could have employees who say they have a religious prohibition against vaccinations, which falls under religious rights.  "This is not a one-size-fits-all situation," said Wilson. Policies and procedures, he also noted, can vary across different industries. There are, for instance, situations where employees live in close quarters on the jobsite, making social distancing a challenging policy to put in practice.  Wilson also said some employees may resist  getting vaccinated. He suggested employers consider incentives to help and encourage their employees to move ahead with getting a vaccine, such as PTO or other options. "Instead of using the stick, you might use carrots," said Wilson.  To view a recording of this presentation, members can log into the Membership Portal at the top right of this screen. To learn more about membership with the Greater Houston Partnership click here, or contact membership@houston.org. New resources around vaccines, the reopening of worksites and more can be found on the Partnership’s COVID-19 Resources page.
Read More
COVID-19

Houston Companies Planning Return to Offices, Plot Post-COVID Changes

3/30/21
Twenty-eight percent of Houston area companies say they have already fully reopened their offices and worksites as the region continues its recovery from COVID-19. Another 9% are planning to fully reopen in April or May and 21% believe they will reopen in June, July or August, according to a new survey by the Greater Houston Partnership of its member companies. September is the target date for 11% of companies while another 3% say it will be October or later. A substantial number (28%) say they haven’t yet determined a reopening date. The vast majority (83%) of respondents said the decision to reopen will be made at the local level and 69% said they will stagger employee return during their reopening instead of calling everyone back at the same time.  Roughly two-thirds (64%) of companies have made decisions on their in-person vs. remote work approach going forward.  Of those, 80% are going to expect employees to be in the office three or more days a week.  When it comes to vaccine protocols, 75% of companies say they will encourage but not require employees to receive the COVID-19 vaccine before returning to work. Just 6% say they will require the vaccine before employees can return and the remaining 19% have not yet determined a formal plan. Many respondents said a key factor in deciding when to return to the office is that all staff have access to the vaccine.  As new COVID-19 cases in our region decline and more Houstonians get vaccinated, area businesses are beginning to contemplate what the “new normal” will look like post-pandemic and when to begin moving in that direction. “We deployed this survey to help guide companies on that next leg of the journey,” said Partnership President and CEO Bob Harvey. “These results tell us that companies are eagerly encouraging their employees to get vaccinated and preparing to bring employees back into the workplace in a carefully considered, safe manner.”  “I want to be clear, we are not out of danger yet; serious virus variants are present in Houston, and more residents need to be vaccinated in the coming weeks before we can definitively declare the worst over,” Harvey said. “Nevertheless, with all adult Texans now eligible for the vaccine and dose availability continuing to ramp up, companies need to prepare now for how they will effectively manage in a post-COVID environment.”  A total of 133 companies responded to the Partnership survey conducted March 22-25. Nearly half of respondents (46%) said they are comfortable attending in-person events today while another 25% said they won’t be ready for in-person events until the CDC declares the nation has reached herd immunity. The remaining respondents said they expect to be comfortable over the next few months.  How companies will assist their employees in the new hybrid environment was the focus of another survey question. Thirty-three percent said they have offered some form of payment/reimbursement to employees to outfit their home workspaces and another 10% say they are considering such a program. Click here for a PDF of the topline results of the survey. 
Read More

Related Events

COVID-19

Restart Houston: Reskilling and UpSkilling for the Post Pandemic Workforce

The Greater Houston Partnership's Restart Houston series offers virtual programming designed to help businesses and organizations prepare for operations post-pandemic.  Join us for a discussion where we will…

Learn More
Learn More
Executive Partners