OEMs sourcing parts from overseas suppliers continue to feel the negative impact of an evolving global supply chain crisis.

While many global manufacturers have already turned to Made In The USA suppliers, the growth in onshoring (or “reshoring”) is expected to continue in the wake of port bottlenecks, material shortages, and surging shipping costs that have wreaked havoc on budgets globally.

A recent Bloomberg News article addresses the rising trend from US executives, including CEOs who have been highlighting plans to relocate production — using the buzzwords in presentations and on earnings calls related to onshoring, reshoring or nearshoring at a much greater clip compared to the onset of the pandemic.

 

This Manufacturing.Net article is a must-read, too. It includes  “10 ways that manufacturers can prepare and benefit:”

 

Creating a Golden Era of Onshoring also touches on a brief history of onshoring. The trends are consistent in the molded rubber category, but it is important to mention that motivations for reshoring over the years were tied to quality standards.

Another key driver has been the shifting analysis of a component’s unit price to the total cost of ownership. The miscalculation of actual offshoring costs averaged 20% to 30% in the pre-COVID environment — and even higher today — with ambiguous inventory carrying costs, shipping and travel expenses, rising offshore wages, as well as intellectual property risk and communication issues.

So, What’s Best for Your Rubber Components Today?

 

STRENGTHEN THE SUPPLIER-OEM PARTNERSHIP:

When it comes to high-precision rubber parts, the boxes have long been checked for quality standards and validation of material formulation. But today’s OEMs also realize the total costs of ownership of Made in USA components to be lower on average and declining.

All-in-all, the supplier-OEM partnership will become more important than ever, and companies that can source a local supplier will gain the advantage.

When producing or assembling parts, OEMs should turn to suppliers that can truly address supply chain gaps and overall manufacturability — such as Rahco Rubber — through design enhancements, advanced product quality planning, and material offsets.

Time to market can also be reduced by leveraging fast prototyping, development and production, with secondary operations. For example, manufacturers often find it easier and more cost-effective for part suppliers to perform various assembly operations. This can range from simple packaging of various components to highly automated cells for part assembly and boxing.

Along with automated production processes, OEMs should source vertically integrated suppliers that work as true partners, from conception to commercialization.

If you must continue to do business with foreign manufacturers, make sure they understand the pace needed to launch new products, process efficiency techniques, like design for manufacturability, and can produce parts to exacting specifications, as well as ongoing compliance. Don’t sacrifice quality or reliability for parts that can be made domestically.

TRUST SUPPLIERS THAT CAN MITIGATE RAW MATERIAL CHALLENGES:

We would be remiss not to mention the unfortunate imbalance in the demand for raw materials that continues to outstrip their supply. Unfortunately, while our industry intelligence suggests that even more challenging times lay ahead, these issue will impact ALL suppliers, domestically and overseas.

Given today’s challenges, Rahco’s first responsibility is to secure specific raw materials for our customers’ custom compound(s). Secondly, we remain committed to

the identification of available offset ingredients and proactivity proposing solutions that meet a material’s performance specifications when Force Majeures or apportionments impact supply availability. Lastly, but certainly not any less important, Racho works to mitigate any negative economic impacts when possible.

All suppliers should be taking these steps to stay focused on their customers’ goals.

We are reminding everyone that options exist. Solutions aren’t out of reach — and we see this as a moment in time to do what we do best: work closely with our customers and add real value by improving and optimizing materials that help mitigate risk and drive sustainable, competitive advantages.

Now more than ever, OEMs are tapping us for answers and we are making our senior staff of chemists, collaborative laboratory alliances, and on-site material science experts available to help identify alternatives for current material formulation while still meeting specifications.

 

Rahco is offering this complimentary analysis to everyone, not simply to validate material formulation but ensure all designs and components are optimized for performance, cost efficiencies, and manufacturability.

To learn more, please contact us or take advantage of our Complimentary Testing Services.