Walmart External Resources: Reshoring Initiative
What is the Reshoring Initiative?
The Reshoring Initiative is a nationally recognized not-for-profit company focused on enabling reshoring. The site contains resources to facilitate and accelerate supplier efforts. Concepts from product selection, to cost reduction, managing the transition and financing are included for both large and small U.S. and foreign-based companies. The Reshoring Initiative gives advice on how to pick the right products and succeed in profitably manufacturing or sourcing product in the U.S.A.
Walmart's research into reshoring as well as feedback from some suppliers indicates that challenges to manufacturing growth in the U.S. still exist such as:
- U.S. manufacturing costs can be higher, especially if suppliers are using offshore manufacturing processes and practices.
- Tooling costs, small electric motor production and apparel cut and sew can be challenging but many workarounds or offsets exist.
- Many wins are occurring in many areas including those where labor is a small percentage of product value or logistics costs are high.
- Even with these and other challenges, we are seeing continued favorable trends to support continued manufacturing growth in the US.
Explore these and other topics at the Reshoring Initiative website.
Resource 1: Timing
Key reasons to reevaluate offshore vs. domestic sourcing now include: rapidly closing wage gaps, automation minimizing labor content, increasing consumer preference for Made in USA and increased recognition of the previously ignored costs, risks and strategic impacts of not producing in the market.
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Resource 2: Product Selection
See what other companies have successfully reshored. Start with products that have issues: quality, delivery, too much inventory, IP risk, long launch times, require close coordination of engineering and manufacturing or are at risk to lose share to a competitive Made in USA product.
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Resource 3: Reevaluation
Go beyond wage arbitrage, purchase price variance and landed cost. Total Cost of Ownership and the Cost Differential Frontier may show that you will be equally profitable with a domestic manufacturing cost 20% to 30% higher than offshore.
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Resource 4: Competitiveness
What to do if the reevaluation suggests the U.S. alternative is close but not quite the best choice? Lean, DFMA, automation, training, government incentives.
Resource 5: Supplier Selection
How to find domestic manufacturers for products or components.
Resource 8: Transition
Planning the transition: people, inventory, tooling, etc. Making a smooth exit from the other country.
Resource 9: Financing
Starting-up an operation or reshoring to an existing facility will often require a combination of long-term financing of capital equipment and working capital and financing of inventory during the transition.
Disclaimer: The information provided on this Resource Page about organizations, businesses or services is for general informational purposes. Inclusion does not mean that Walmart Inc. endorses any organization, business or service. Further, Walmart Inc. cannot and does not make any guarantees as to the quality of services or products provided by any organization, business or service listed here.
