Tight Lines Advisors’ Strategic Approach to Accelerating Manufacturing Productivity Provides Pathways for Re-Shoring Trend Sustainability

“When productivity improves, margins improve,” continues Abplanalp. “Conversely, stagnant or reduced productivity squeezes margins, adversely impacts growth, and inhibits marketplace competitiveness.”

Gross output of U.S. manufacturing industries — counting products produced for final use as well as those used as intermediate inputs — totaled $6.2 trillion in 2015, about 36% of U.S. gross domestic product, nearly double the output of any of the other big sectors: professional and business services, government and real estate.

Manufacturing companies also account for about 77% of what the private sector spends on research and development each year. Many industry experts suggest that if it weren’t for manufacturing; there would be considerably less innovation in the United States.

Most recently, a number of market forces have aligned to make re-shoring of overseas operations a consideration for U.S.-based manufacturers. Among the influential factors are a growing reduction in the wage gap between American and foreign labor, lower U.S. energy costs, and a greater ability to control scheduling, supply-chain and quality.

Moving to a potentially higher cost labor area can be a difficult consideration, however, “More than any other factor, what truly makes re-shoring both viable and sustainable is productivity,” states John Abplanalp, Founder and President of Tight Lines Advisors LLC, a firm that partners with manufacturing companies to improve their operational performance gross margin.

“When productivity improves, margins improve,” continues Abplanalp. “Conversely, stagnant or reduced productivity squeezes margins, adversely impacts growth, and inhibits marketplace competitiveness.”

Concern over a possible slowdown in the re-shoring trend was recently noted in a March 2017 Labor Department report indicating that the U.S. domestic workforce is not gaining productivity rapidly enough to provide for robust economic expansion that the U.S Government is projecting. Findings revealed that across the board, worker productivity fell 0.6% since January. A much bigger drop than expected, this statistic underscores the main challenge to greater economic growth.

Yet, despite the ups and downs of the economy over the…

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