There is a perfect storm brewing in the U.S. manufacturing sector. Pent-up demand and the imperative to re-shore production are converging with an unprecedented stream of government stimulus money to create an explosive mixture. It hasn’t detonated quite yet, but it’s only a matter of time. And when it does, those who aren’t ready are going to be left far behind if they are left standing at all.
Consider the impact of a year’s worth of consumer spending compressed into a couple of quarters, fueled by a massive stream of cash directed at a manufacturing economy that is not yet up to speed. Yes, that’s a long-term prescription for inflation, but today those dollars are waiting to be spent and increasingly confident consumers will use them to drive demand well into 2021.
At the same time, manufacturers who have learned a bitter lesson on the perils of off-shoring their supply chains are starting to bring them back on-shore. Right now, they’re walking them back, but they’ll soon be jogging and 2021 could see a flat-out sprint. It will be driven by a range of factors, including fear of global instability, country and border closures, and anti-China sentiment, whether it’s deserved or not.
If President Trump wins a second term you can add a trade war mentality to that list because the gloves will be off in the U.S.-China trade fight. Like the stimulus money, the trade conflict can be seen as good or bad long term, but either way it will drive manufacturing and supply chains back to the U.S.
So, if that vision of the future is anywhere near correct, what can you do right now to make sure you’re ready for it? You can start with the answers to a few critical questions:
- What is the status of my supply chain? Is it based offshore? Do I need to bring it back?
- How will higher tariffs impact me?
- Are my suppliers financially sound? Did they upsize or downsize in 2020?
- Do I have the people I need to be competitive? Have I lost important talent?
- Did I downsize in 2020?
- Do I have enough people to handle a roaring comeback?
- What are my competitors doing? Did they survive 2020? Did they upsize or downsize? Are they offshore?
- Can they ramp up quickly to meet surging demand?
For example, my company, Promess, is getting ready for a roaring manufacturing economy. We have closely monitored our supply chain, made necessary adjustments and increased our critical component inventory. This helps us be certain we can service our customers with both the finished products and maintenance supplies they need. We are in good shape overall while some of our peers are struggling.
Upskilling the Workforce
Hard times offer excellent opportunities for companies to add new talent because good people are often available who would not be otherwise. We have added people in several key positions and have also used the slow times to ramp up training to improve the skills of our people across the board.
We’ve closely watched our competitors and are confident we can maintain and enhance our position in a roaring economy. We also have used the last few months to enhance our technology base and develop new products, systems and applications.
Finally, never lose sight of the fact that Made in the USA is a powerful brand that’s identified with quality, pride and homeland labor support. It can only gain in stature when it also stands for security of supply.