{"id":12905,"date":"2021-01-25T22:04:01","date_gmt":"2021-01-25T22:04:01","guid":{"rendered":"https:\/\/www.innovationaus.com\/?p=15900"},"modified":"2021-01-25T22:04:01","modified_gmt":"2021-01-25T22:04:01","slug":"reshoring-might-work-but-needs-more-data","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2021\/01\/25\/reshoring-might-work-but-needs-more-data\/","title":{"rendered":"\u2018Reshoring\u2019 might work but needs more data"},"content":{"rendered":"

As interesting as the<\/strong> topic of reshoring might be to some manufacturers, its discussion in Australia relies heavily on hunches and anecdote.<\/p>\n

In March 2019, when this website asked a respected economist with expertise in manufacturing about reshoring in Australia, they replied that they had no research specific to the topic.<\/p>\n

\u201cPerhaps Australian businesses are more focussed on building their role in\u00a0international supply chains<\/a>, rather than maximising their Australian-based activity,\u201d they suggested, though it was hard to be certain, given a lack of evidence.\u00a0Accordingly, they did not want to be quoted by name.<\/p>\n

Life has, of course, changed a lot in the last two years.<\/p>\n

\"Freight
Reshoring options: Are manufacturers relying on hunches and anecdotes? Credit Blume Global<\/figcaption><\/figure>\n

Twenty-twenty saw an apparent resurgence of interest in the topic<\/a>, sometimes described in terms of \u201ceconomic\u00a0sovereignty\u201d<\/a>\u00a0or other terms. This website reported\u00a0on contract manufacturers<\/a>\u00a0who spoke of increased enquiries for people\u00a0looking to bring production home<\/a>.<\/p>\n

Freight woes<\/strong><\/p>\n

Perhaps it is a good time to return to\u00a0the subject<\/a>, with the difficulties for importers due to a squeeze on international freight.<\/p>\n

The pandemic has encouraged a shift in spending from services to goods, leading to demands on capacity that can\u2019t be met, buildups of empty containers at ports around the world, and price increases.\u00a0The Financial Times<\/i>\u00a0reported last week that shipping costs from China to Europe had \u201cmore than quadrupled in the past eight weeks.\u201d<\/p>\n

\u201cAll around the world, empty shipping containers are in the wrong place. They are in the countries that receive cargo, like Australia,\u201d\u00a0is how Shipping Australia put it<\/a> in a recent explainer.<\/p>\n

\u201cThey need to be in the places that send cargo, like China.\u201d<\/p>\n

Startup Foundri, which is building an online marketplace to link local manufacturers with those who need things made, predicts Australian companies will increasingly look onshore. Co-founder and chief executive Adam Weaver says they have \u201chad a few discussions with customers\u201d who are looking to reshore, predominantly due to logistical difficulties, with local supply \u201cbeing more manageable during these uncertain times.\u201d<\/p>\n

\u201cThe pandemic has forced people to rethink how we get new products produced and will soon realise that it makes sense as it is far easier to communicate with locals than offshore,\u201d Weaver tells\u00a0@AuManufacturing<\/i>.<\/p>\n

\u201cDelivery times to customers will also be reduced and prices will be less due to the removal of increased freight costs.\u201d<\/p>\n

Making the case<\/strong><\/p>\n

In the United States, the Reshoring Initiative and\u00a0The Association For Manufacturing Technology (owner of The International Manufacturing Technology Show) are currently running a \u201cRebuilding the Supply Chain\u201d survey.<\/p>\n

The survey is gathering data on topics such as the severity of disruptions to supply chains due to Covid-19, the role of technology in known cases of reshoring, and what products or components hold the biggest opportunity for reshoring.<\/p>\n

The RI was founded in 2010, and among its work is a Total Cost of Ownership estimator, which allows companies to make a holistic decision based on some 30 different factors. These include shipping time, carrying costs, quality and re-work, and IP risk.<\/p>\n

The RI also keeps a comprehensive list of companies bringing production back home (and of foreign direct investment in manufacturing) as well as the impact of this in terms of new jobs.<\/p>\n

More data and real-world examples would not go astray in any conversation we might have about localising production here.<\/p>\n

\u201cOne reason that reshoring and such has happened is if you believe it\u2019s possible, it\u2019s because we\u2019ve proven that it\u2019s real. It\u2019s easier to believe something is possible if you see it,\u201d\u00a0as the institute\u2019s founder Harry Moser told us<\/a> a couple of years ago.<\/p>\n

\u201cIf you see a ghost, you\u2019re more likely to believe in ghosts.\u201d<\/p>\n

\u201cThe pandemic has forced people to rethink how we get new products produced and will soon realise that it makes sense as it is far easier to communicate with locals than offshore,\u201d says Adam Weaver<\/p>\n

According to his group\u2019s research,\u00a0nine-tenths (171,000) of all new US manufacturing jobs created in 2017 were the result of reshoring<\/a>.<\/p>\n

A figure such as that goes a long way in telling a story, and we simply don\u2019t have anything like it here. When reshoring does get a guernsey here, if it has any sector-specific figures at all, they are borrowed from overseas.<\/p>\n

For now, the best we seem to have in Australia are hunches and the occasional anecdote.<\/p>\n

Last week reshoring<\/a>\u00a0did get a run in local media, albeit for a well-known economist to suggest he saw it as unlikely to take off.<\/p>\n

And besides the odd example,\u00a0notably Ty Hermans of Evolve Group<\/a>, there are few people here that will tell the reshoring story.<\/p>\n

Weaver, however, is optimistic we will see more of it this year and beyond.<\/p>\n

\u201cAt present one of the pain points for customers seeking more specialised products to be made is that there are limited suppliers here in Australia,\u201d he says.<\/p>\n

\u201cAs demand increases Australian manufacturers will look to invest in technology and equipment to capture the demand creating a more sustainable industry in Australia and potentially we will see a growth within the industry.\u201d<\/p>\n

We would welcome that, a mounting collection of positive examples, and more data.<\/p>\n

This story originally appeared in\u00a0@AuManufacturing<\/a>. You can subscribe to its\u00a0newsletter here<\/a>.<\/em><\/p>\n

The post ‘Reshoring’ might work but needs more data<\/a> appeared first on InnovationAus<\/a>.<\/p>\n\n

This post was originally published on InnovationAus<\/a>. <\/p>","protected":false},"excerpt":{"rendered":"

As interesting as the topic of reshoring might be to some manufacturers, its discussion in Australia relies heavily on hunches and anecdote. In March 2019, when this website asked a respected economist with expertise in manufacturing about reshoring in Australia, they replied that they had no research specific to the topic. \u201cPerhaps Australian businesses are…<\/p>\n

The post \u2018Reshoring\u2019 might work but needs more data<\/a> appeared first on InnovationAus<\/a>.<\/p>\n","protected":false},"author":626,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1913,1912,3141,1892,3142],"tags":[],"_links":{"self":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/12905"}],"collection":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/users\/626"}],"replies":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/comments?post=12905"}],"version-history":[{"count":2,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/12905\/revisions"}],"predecessor-version":[{"id":15020,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/12905\/revisions\/15020"}],"wp:attachment":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/media?parent=12905"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/categories?post=12905"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/tags?post=12905"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}