Five steps to help U.S. OEMs and brands hire more domestic suppliers

In 2013, we were a contrarian voice forecasting that headwinds battering U.S. manufacturing were subsiding and that an extended period of expansion was imminent.

But even we couldn’t have anticipated that, by June 2020, America would be united in its support for a full-on manufacturing comeback. Turns out COVID-19 is only the latest episode in a string of events that’s persuaded U.S. companies and business leaders that more domestic manufacturing serves our interests.

There’s also consensus on what needs to be done. We know we need more qualified workers. We agree that manufacturing’s digital transformation including automation and robotics must accelerate. And we support elected officials favoring industry with policy measures like the Beat China Act and others that provide incentives for companies to make more products here.

But these broad initiatives take time, and next week, or next month, when a production order needs to be filled, for many companies it will be back to business as usual. More needs to be done to compel OEMs and brands to change their behavior and consider new sourcing options.

U.S. manufacturing will roar back only when companies begin buying more services and products from domestic suppliers. Here are five things that would help:

1. Rally around manufacturing industries with clusters of suppliers and providers

Brands like Vestas and Tesla attract a constellation of suppliers — clusters of fabricators and service companies tuned to their needs. The supply chain for a small food brand (or battery maker or aviation OEM) is also unique.

Leadership in developing new industry-tuned clusters of suppliers, from funding through fabrication to shipping, should pay off in renewed interest and support from U.S. brands.

2. Build on local and regional success to expand nationally

If a growing marketplace of ideas, of products and services, is the national goal, success will first come from local and regional groups making new connections. More local collaboration, more transparency within industry supply chains, and more buying and selling across trade silos is the sure path to a more capable national network — and more options for OEMs.

3. Digital tools to power communication throughout the supply chain

A relationship between manufacturer and supplier pivots on any one of a dozen key variables. Again, companies tend to fall back on what’s known. Mapping the capabilities of domestic suppliers is hard enough; sorting through others that also influence compatibility — like company history and culture — and communicating with new partners, even more so.

The next generation of digital tools that transforms the process of helping U.S. companies find the perfect domestic supplier network will be the first.

4. Manufacturing fluency: We need business and political leaders encouraging local brands to invest in people and communities here

Many elected officials don’t know, or don’t care, where local OEMs or brands manufacture. This must change. U.S. companies transformed China into an economic powerhouse. Today the decision of where a company will source a supplier is a choice between supporting communities offshore and communities here. Gauge our manufacturing fluency in this election cycle. If your candidate comes up short, make a different choice.

5. Tell the truth

Without a coherent national manufacturing policy, local and regional efforts can succeed but national efforts will fall short.

In 2013, many business and policy leaders pushed back on the notion that manufacturing was in America’s strategic interest. Be part of the solution — or bow out of the process.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.