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A Conversation with... IPC's Sharon Starr

It's always with bated breath that I await the publication of a new marketing report by IPC’s Director of Market Research Sharon Starr. I have found these reports to be not only extremely valuable, but also interesting and informative as well. I was able to read IPC’s latest report on one of my current favorite subjects: Onshoring. After reading the report, I thought it would be interesting to take a look behind the scenes and find out what I could about this report: How it was compiled, who participated in the survey, and who it would best benefit. I got in touch with the report’s author Sharon Starr and asked her a few questions.

Dan Beaulieu: Why this report? Why now?

Sharon Starr: Onshoring has been a hot topic in our industry for at least three years. Much of what was being said about it included questions like, “Is this a real trend or just an urban legend?” IPC was in a good position to provide an answer to this question through the use of a “fast facts” survey. The first IPC survey on this subject was conducted in 2012. The findings indicated that many executives were interested and were considering the possibilities for their own companies. Subsequent surveys in 2013 and 2014 found that some companies were planning to onshore at least a part of their business, and a few had actually done it.

The conversations about onshoring that I heard this year were no longer questioning whether it is a real phenomenon--high-profile news reports about onshoring by companies like Apple and GE proved that it is happening. Instead, this year’s buzz has revealed questions about the extent to which it is happening and how it is affecting the companies that are doing it. That was the impetus for this year’s IPC survey on the financial and operational impact of onshoring on the handful of companies implementing this strategy.

Beaulieu: How did you compile the data?

Starr: In each of the last three years, we sent out a confidential online survey to executives and operations managers at IPC member and non-member companies.

Beaulieu: Who participated in the surveys?

Starr: Our most broad-based survey was in 2012. After cleaning the raw data we had useful responses from 229 companies representing many segments of the supply chain as well as PCB fabricators, EMS companies, and OEMs worldwide. The 2013 survey looked at the trend in the Americas targeted companies in all industry segments with offices in the Americas. Most of the 93 respondents were North American companies, but included some overseas-based companies. The 2014 survey was specifically aimed at companies in the Americas and Europe that had actually engaged in on-shoring or changed to domestic sources of supply and could report on the impact to their business. Of the respondents, only 16 companies qualified to take the survey. They represented companies in various industry segments in North America and Europe.

Beaulieu: Who will benefit from this report?

Starr: The report contains useful information for executives assessing their companies’ global footprint, considering where to locate new operations or whether to change suppliers, and doing capacity planning or any long-range strategic planning.

Beaulieu: How did you conduct the surveys? Live? Phone? Written?

Starr: All IPC surveys are done electronically through a secure online survey system. This system provides the highest level of security for companies’ confidential data, and it is most quick and efficient method for the survey respondents.

Beaulieu: What was the general feeling of the people you surveyed?

Starr: It’s hard to sum up the feelings of the respondents because they were so varied. In the 2012 and 2013 surveys, attitudes ranged from matter-of-fact (such as needing to be where their big customers are) to emotional (patriotic expressions of hope and insistence that something must be done to save the North American electronics industry). The 2014 survey revealed that some respondents were pleased by the results of on-shoring, while others were still skeptical.

Beaulieu: Although this was a relatively small survey sampling why do you think it is significant?

Starr: The 2014 sample was small because the fact is there are still very few companies that have implemented onshoring. This is still a relatively new trend. The 2014 survey and report are significant because they gave us the first glimpse into the impact of onshoring on companies’ business results.

Beaulieu: Do you feel this is only the beginning of the onshoring movement?

Starr: I’m not making any predictions about this because so much depends on what the leading OEMs in our industry do in the future. As long as those industry leaders stay in North America and do some manufacturing here, their suppliers will stay as well. The U.S. OEMs’ decisions will depend in part on what the government does to make the USA an attractive business environment, and on what the industry, government and educational institutions do in cooperation to ensure the availability of skilled workers. IPC is currently addressing the skilled workforce element by doing an extensive study on the U.S. skill base and how all stakeholders can contribute to strengthening it.

Beaulieu: What did you learn from compiling this report?

Starr: The clearest finding was that, while many companies are considering on-shoring, relatively few are actually doing it. Measurement of the impact in those companies is also in its early stages.

Beaulieu: What is your opinion of where this onshoring trend is headed?

Starr: I think the days of offshoring decisions made solely on the basis of cost are over. Companies are now approaching this issue strategically, looking at their global footprint in light of all factors that contribute to their success. Determining a geographic strategy is becoming recognized as an important aspect of strategic planning in the industry. As a result, I expect both offshoring and onshoring decisions to have more successful outcomes.

Beaulieu: Final thoughts and comments?

Starr: Another valuable tool for executives doing the kind of planning that leads to an optimal global footprint is Where in the World? A Regional Strategy Roadmap for Electronics Manufacturers. It is a comprehensive resource for data and analysis on 30 countries, and the outlook for globalization and regional shifts in the industry. BPA Consulting developed the study for IPC and it was just published this July. It is available in IPC’s online store along with the new onshoring study.

Getting the Report

On-Shoring in the North American Electronics Industry: 2014 Update on Trends and the Impact on Companies is a product of IPC’s market research service and is available to IPC members for $225 and to non-members for $450. For more information about this report or other IPC market research services, contact Sharon Starr, IPC director of market research, at 1-847-597-2817, or visit IPC’s Website at www.ipc.org/industrydata.