18 MiMfg Magazine August 2020
Unique Smart Manufacturing Data
Suggests Reshoring is Happening Now
By Jerry Foster, CTO • Plex Systems
Manufacturers are resilient. After COVID-19 brought
most plant operations to a virtual standstill through
late winter and early spring, the global manufacturing
community swiftly recovered and, as of late June, is
approaching pre-COVID-19 rates of production.
What’s even more impressive about this robust
resurgence is the speed with which it happened. New
reports from IHS Markit and ISM, two organizations
that track U.S. manufacturing industry orders and
production, show that after steep drops in activity in
April, the industry has expanded for two consecutive
months. Similar recoveries are being seen in many other
regions around the world, surprising industry experts.
The unique smart manufacturing data that we at
Plex Systems have been monitoring show similar positive
recovery patterns (see right for comparisons between
China, Global and Michigan activity for the first half of
2020). Our evaluation of the production activity
(e.g., barcode scans, moved inventory, shipments,
etc.) of approximately 1,200 plants around the world
running their operations in the cloud indicates that
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Smart Manufacturing Production Activity
January 1, 2020 – June 21, 2020
the global manufacturing community is operating at
78 percent of pre-coronavirus rates.
But we’re also seeing that not all recovery patterns
around the world are the same. Our newest data shows
that while manufacturers worldwide generally experienced
a U-shape recovery — including manufacturers with
plants located in the state of Michigan — China is the
only country that has consistently bucked that trend.
China continues to experience lower rates of activity
when compared to the global manufacturing community.
Since mid-March, the country has hovered around
50 percent of pre-COVID-19 rates of activity. This
trend suggests that either reshoring or nearshoring
operations away from China is not something that
will happen in the months and years ahead — it’s
already happening now.
So, what does this mean for manufacturers?
It’s time to take action to reevaluate supply chain
approaches and minimize risks.
Reshoring or nearshoring activities are two
potential approaches to reducing supply chain risk,
but moving to a multi-threaded supply chain can be
achieved in other ways as well. Manufacturers must
carefully consider the best strategy for their individual
businesses. Cost and competitive issues must be factored
into long-term decisions and taken into consideration
alongside favorable tariffs or tax breaks.
Regardless of how manufacturers move forward,
they must do so with urgency. The time to begin making
incremental progress toward building a more resilient
supply chain shouldn’t be when the next global crisis
occurs. The time to take action is now. 6
Jerry Foster is Chief Technology Officer for Plex. He
may be reached at [email protected] or 888-454-7539.