CompanyWeek turns five this week. The question on my mind after five years and 1,014 company stories: What's the one takeaway above all others? What have we learned?
In the context of challenges, we've learned that workforce is the defining issue in manufacturing today. Convene manufacturers from across different industries, as we do often, and workforce is always a ready topic, a constant irritant. The worse news is that for some industries, there doesn't seem to be an end in sight to the workforce conundrum.
But manufacturers aren’t alone. Workforce is a challenge across the economy. Manufacturing’s challenge may be unique -- tech companies don’t have to sell the virtues of a career in software or IT, for example. But neither do manufacturers in every one of the industries that comprise the sector.
Rather, workforce is such a pressing issue because manufacturing is a growth sector. Today it makes business sense to manufacture more products in America. Products that before now have been cheaper to produce offshore. Products that will reimagine manufacturing's image and help solve the workforce challenge by attracting entrepreneurs and new skilled workers.
That's the story.
It won't happen quickly in every industry. And other countries won't give up U.S. brands without a fight. Many will invest to improve the production ecosystems that meet the needs of thousands of U.S. companies. The struggles and demise of proud manufacturing brands will continue to capture headlines.
But the push to make more stuff in the U.S. is inexorable. As Harry Moser, founder of Reshoring Inititiative, and other research analysts are documenting, it now makes business sense to locate production in the U.S. when it didn't before. Brands are acting in their self-interest by investing in the U.S. communities where design, engineering, and customers are located. Workers are watching factories automate -- manufacturing is a path to cool learning. Educators, developers, elected officials, all see a path to prosperity that includes manufacturing jobs and exports.
Today the story of manufacturing is the opportunity to repatriate production of a sizable portion of $2.2 trillion in imports, much of it the products of U.S. brands, brands that will make more things here if possible. It's not only possible, it's probable. Moser does the math:
"20 to 25 percent of the roughly $2.2 trillion in goods imported to the U.S. have a higher U.S. FOB price, but a lower total cost of ownership (price plus all logistics, risks and opportunity costs)," Moser says. "Just getting companies to do the total cost of ownership math correctly would result in a 20 percent increase in domestic manufacturing. Call it $400 billion in new goods produced here and two to three million new manufacturing jobs."
It's a business development bonanza.
Our path is telling the story of innovative manufacturers and connecting the community with information and ideas, with resources and people. We're on a mission to help brands manufacture more in the U.S., to travel the "last mile" to domestic production.
It's not an easy road. The last mile is a minefield of disconnected industries, of supply-chain gaps, of ambivalence, of territoriality, of institutional memory that's faded and very difficult to reprise.
Stories are often better told in person, so we're convening business leaders more often. Our Connected Industry CEO series continues September 12 in Ft. Collins, and in Colorado Springs later in the month.
And October 18 in Denver, we're excited to again bring the apparel and outdoor industry together at the the fifth annual Apparel & Outdoor Industry Manufacturing Summit, co-presented by Colorado State University and Manufacturer's Edge. We'll look more closely at projects and plans in the works that give companies and brands a place to go to learn, to innovate, to prototype and manufacture, and to cluster in pursuit of growth.
Send me a note for information about either.
Let's travel the last mile together.
Bart Taylor is publisher of CompanyWeek. Email him at email@example.com.