Pennsylvania Daybook

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<p>HANOVER TWP. &#8212; Reshoring &#8212; the practice of bringing manufacturing and services back to the United States from overseas &#8212; of manufacturer operations has declined for the past four years, according to the second annual A.T. Kearney U.S. Reshoring Index report.</p><p>The report, released in December 2015, analyzes public data and shows &#8220;manufacturing activities to the United States has once again failed to keep up with offshoring.&#8221;</p><p>&#8220;There will be 12 cents worth of offshore production bound for the U.S. market for every $1 of domestic manufacturing gross output &#8212; manufacturing sales,&#8221; the report states.</p><p>Northeastern Pennsylvania Industrial Resource Center (NEPIRC), located on Young Street in Hanover Township, works with global manufacturers to help bring &#8220;component parts (screws, nuts, bolts, etc.)&#8221; back to the United States, <a href="https://www.timesleader.com/news/local/501546/governors-office-says-web-com-expansion-in-drums-will-create-74-jobs" target="_blank">more specifically, to Northeast Pennsylvania.</a></p><p>Eric Esoda, president of NEPIRC, believes &#8220;manufacturers can&#8217;t change quickly.&#8221; Esoda also cautions people to not associate &#8220;reshoring with American jobs.&#8221;</p><p>American jobs, he said, will be part of a &#8220;delayed (job) creation.&#8221;</p><p>&#8220;Things won&#8217;t change on a dime,&#8221; said William Schoen, career readiness program coordinator.</p><p>Esoda also questions if the reshoring/Made In America initiative from prior years was a sales tactic for the holiday or if the &#8220;(big box retailers) really ever lived up to their own internally set goals.&#8221;</p><p><strong>What is reshoring?</strong></p><p>Reshoring is the process of returning outsourced products to the United States. The process became standard around the time the North American Free Trade Agreement took effect.</p><p>&#8220;The labor cost was so much cheaper, the transportation cost was so much cheaper, energy cost overseas was so much cheaper,&#8221; Esoda said.</p><p>Businesses were able to take the hit for a damage/defective product because of the inexpensive price of the good.</p><p>&#8220;It&#8217;s almost as if you had nine good parts out of 10, you were still up money,&#8221; Esoda said.</p><p>Manufacturers had done leg work and vetted suppliers in international markets, and the supply chain became &#8220;comfortable&#8221; offshore.</p><p>NEPIRC uses &#8220;cold hard facts&#8221; and &#8220;TCO (total cost of ownership) tools&#8221; to quantify the offshore cost of a product. Offshore cost looks at currency change, shipping costs, insuring inventory as well as warehousing and holding the product until use.</p><p>&#8220;(If the offshore company) wants you to put it (money) into an escrow account, you&#8217;re tying up the money for three to four weeks, opposed to three to four days (if you buy domestically),&#8221; Esoda said.</p><p>Schoen warns about hidden costs when factoring in the &#8220;real cost&#8221; of a product. The cost of shipping delay of a product is one of the bigger hidden costs.</p><p>&#8220;We don&#8217;t see those (hidden costs) but those are quantifiable numbers that add to the overall per unit cost of an item,&#8221; Schoen said.</p><p><strong>Made in America</strong></p><p>Assisted through federal and state government monies, NEPIRC strives to help manufacturers grow and thrive in a local eight-county region.</p><p>Esoda said the Northeastern Pennsylvania market is ripe for stamped and perforated metals &#8212; polished steel around an exhaust, exterior steps with grates for drainage &#8212; production.</p><p>&#8220;The backbone of our economy is the local manufacturers,&#8221; Schoen said.</p><p>Reasons to manufacture local range from currency exchange rates to political uneasiness in a country, but the biggest is the challenge of having another supplier see specs of a product.</p><p>&#8220;Do you feel comfortable giving them that insight (design components, specifics) into your company?&#8221; Esoda asks potential companies who want to reshore.</p><p>Bringing manufacturing back to Pennsylvania, or the United States, can also stimulate the local economy.</p><p>&#8220;They&#8217;re going to need more landscaping; they&#8217;re going to use more electricity,&#8221; Esoda said.</p><style>
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<div class="neFile"><img class="neImage" src="https://www.timesleader.com/wp-content/uploads/2016/02/reshore-main-2-21-2016-2.pdf">
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<div class="neCaption">Esoda </div></div><div class="metaInfo"><photo2>https://www.timesleader.com/wp-content/uploads/2016/02/web1_Eric-Joseph-Esoda-2.jpg</photo2><caption2>Esoda </caption2><photoCredit2></photoCredit2></div></div>
<div class="metaInfo"><subheadMeta>NEPIRC aids companies wanting to make products in US</subheadMeta></div><div class="metaInfo"><bylineMeta><p>By Melanie Mizenko</p><p>mmizenko@www.timesleader.com</p></bylineMeta></div><div class="metaInfo"><shirttailMeta><p>Reach Melanie Mizenko at 570-991-6116 or on Twitter @TL_MMizenko</p></shirttailMeta></div>

Hanover Township business helps local manufacturers reshore products back to Northeast Pennsylvania