Reshoring + AI: Is your Lean ready for what’s next?
By Tony Rodriguez, President, Daniel Penn Associates, LLC
This recent IndustryWeek piece by University of Phoenix COO Raghu Krishnaiah underscores that work is returning to the U.S. faster than many manufacturers are ready to support—and AI is accelerating both the opportunity and the complexity. What will reshoring mean for your company’s future?
Reshoring in a higher-labor-cost environment means Lean can’t stay static. To compete, operations need a step-change in productivity, flexibility, and time-to-stable output, while simultaneously closing skills gaps and integrating digital tools responsibly. Here are a few focus areas we’re urging clients to revisit:
For CEOs and CFOs
- Tie Continuous Improvement (CI) to the profit and loss (P&L): Convert Lean wins into unit-cost, cash, and capacity impacts (value-stream P&Ls, inventory turns, OEE-to-throughput).
- Capital and automation: De-risk with pilot-to-scale playbooks; right-size automation around stabilized standard work; avoid tech before flow.
- Reshoring economics: Compress ramp curves, shorten cash conversion cycles, and design for smaller, more variable lot sizes.
For Manufacturing Leaders
- Stabilize before you digitize: 5S, standard work, layered process audits, workflow, and visual management that operators actually use.
- Flexibility at the constraint: SMED, line balancing, takt time, mixed-model sequencing, and error-proofing to hit U.S. takt with shorter runs.
- Reliability: Integrate Total Productive Maintenance (TPM) with predictive analytics; build problem-solving muscle at the Gemba, not just in dashboards.
For HR and Talent Leaders
- Skills for the future state: Create a skills taxonomy tied to value streams and redesigned roles, and adopt a skills-based hiring approach.
- Upskilling that sticks: Training Within Industry (including job instruction, job relations, and job methods), micro-credentials, earn-and-learn pathways with education partners; accelerate supervisor capability.
- Retention through growth: Visible career ladders, cross-training matrices, and modernized onboarding tied to standard work.
For Internal Lean Leaders
- PDCA meets data: Use A3s or Project Charters to prioritize data problems worth solving; avoid “pilot purgatory” with clear problem statements and measures.
- Governance: Standardize how digital tools change work (to minimize risk, ensure compliance, maintain continuity, enhance security, and increase transparency and accountability.
- Measure what matters: Lead time, first-pass yield, changeover, flow index—then connect those to financial outcomes.
Questions to Ponder
- Should we phase the implementation to minimize production disruptions?
- Will our production volumes or product mix change significantly in the next 3-5 years?
- Can we scale one successful pilot across lines and sites within 90 days?
- Can we demonstrate, through a value stream analysis, how Lean improvements affect unit cost and capacity?
- Are we dedicating time to coach and train our people, and also sustain standard work amid technological changes?
- Changeovers: are they fast enough to profit from smaller lot sizes?
- Which tasks are ready for AI/automation after process stabilization—and which are not?
- Do we have a system for teaching skills and learning pathways that are mapped to our future-state design?
For more continuous improvement articles:
How Daniel Penn Associates Can Help
- Executive and plant leadership workshop: Align strategy, operations, HR, and finance around a coherent CI + digital plan.
- Reshoring + AI Lean Readiness Diagnostic current-state value-streams, capability/skills mapping, tech opportunity scan, and a sequenced roadmap with impact estimates.
If Krishnaiah’s message resonated—skills gaps, misaligned talent strategies, and the speed of AI adoption—now is the time to adapt your Lean system for U.S.-based competitiveness. Let’s talk. Visit danielpenn.com/contact to schedule a 30-minute conversation about your situation.