A.T. Kearney’s Study on Reshoring is Just Plain Wrong

A.T. Kearney recently published the results of a new study stating that reshoring is not happening as predicted in U.S. manufacturing.

But their survey is just plain wrong and appears to be skewed towards causing a controversy instead of reporting on the momentum building for Reshoring.

Not only are more than half of US manufacturers considering reshoring now, we have some really great examples of success stories including GE Appliance Park, Starbucks, Apple and others.

In addition, we can point to other companies such as Haier, Nissan and Smithfield Foods where Foreign Direct Investment (FDI) has directly resulted in the establishment of more manufacturing in America.

All of the signs and statistics (other surveys by Boston Consulting Group, Alix Partners and several European studies) point to the rebuilding of manufacturing in America and in Western Europe.

The trend is strong and we are very optimistic that it will continue to be so. US jobs loss to offshoring is now about equivalent to jobs created or reshored to America.

We need to be reshoring supporters and make more of this happen, not detractors.

Our friend, Harry Moser at the Reshoring Initiative, confirms that the A.T. Kearney report made errors in last year’s study and again this year.

He points out in an article in Plastics Today that A.T. Kearney does not actually measure reshoring, but rather bases its report on import trends…not an actual measure of the executive decisions in favor of building manufacturing in the US.

We agree, just looking at imports is only a small part of the picture and misrepresents reshoring.

Although companies often include Mexico in their evaluation of global manufacturing sites, the Reshoring Institute doesn’t believe this detracts from the on-going interest in American reshoring.

What we are seeing are thoughtful executives who evaluate all of their global manufacturing alternatives.

Take Pete Ruggerio, EVP of Global Operations and Technology at Crayola, for example.

We spoke with him recently about their “total cost of ownership” approach in evaluating where in the world to manufacture. Proximity to primary markets, responsiveness to changes, logistics costs, quality and automation are just a few of the things they consider in these decisions.

And speaking of automation, we do not expect all of the old jobs to return to the U.S. What is happening is a manufacturing evolution. The next phase is advanced manufacturing in America where manufacturing sites are full of robots, 3D printers and sophisticated machine tools.

In December I visited the University of Birmingham, England where they are leading a global program on reshoring. They have enlisted the support of universities across the European Community and have invited the University of San Diego, where our Reshoring Institute is housed, to join them.

The evidence is clear: reshoring is happening in the U.S .and in Western Europe and this will lead to economic development and growth on both continents.

We think the evidence shows that A.T. Kearney is way off base in its statements about reshoring.

They are just plain wrong about reshoring efforts in America.

We continue to base our opinions on actual evidence and we continue to see the outlook as optimistic.

A.T. Kearney’s Rebuttal: 2015 Reshoring Index Finds That Reshoring Is Failing To Keep Up With Off-Shoring