Some manufacturing heads back to USA

  1. profile image48
    zll3780posted 8 years ago

    And with China 12 hours ahead of the East Coast, Jason had to call contractors almost daily at about 11 p.m. "My wife loves that," he says.
    The company has hired five employees at its Florida plant and plans to add another 15.
    No shipping headaches
    Other reasons manufacturers are switching to the U.S.:
    Lower inventory costs and fewer shipping hassles. Diagnostic Devices, which makes blood-glucose testing strips and monitors for diabetics, has to ship about 20% more product than it needs because of the month-long trek ships take to the U.S. from contractors in China and Taiwan, says Chief Operating Officer Rick Admani Abulhaj.
    The company also keeps about $4 million of extra goods in the warehouse in case of delays, forcing it to tie up a total $6.5 million in inventory compared with about $1 million if products are made in the U.S.
    If products are defective, replacing them takes five months after figuring squabbles with contractors, shipments of raw materials back to Asia and reviews of new samples, he says.
    In September, the company plans to move production of the strips to a new factory in Charlotte, where most of the manufacturing process will be automated to cut labor costs. Monitor-making is scheduled to move to Charlotte by the end of 2011. The firm is hiring 20 employees.
    Protection of intellectual property. With intellectual-property laws often enforced less vigorously in Asia, many manufacturers complain about counterfeiting. Farouk Systems, a top maker of hair irons and hair dryers, has spent $500,000 a month battling counterfeiters who put the company's trademark on copies of Farouk's products, says CEO Farouk Shami.
    "Counterfeiting is killing us," he says.
    To remedy the problem and whittle inventory costs to $50 millionfrom $120 million, Farouk last July moved some assembly of its irons and dryers from South Korea and China to a Houston factory that employs 1,000. Manufacturing costs in China are still about 30% lower. But Farouk believes the appliances' "Made in the USA" stamp will increase sales to hair salons.
    Ease of meeting customer demand. The Outdoor GreatRoom Co. had to order products such as fire pits nine months in advance to fit into its Chinese contractors' production schedule and account for shipping lags. Most sales are in the fall, forcing the firm to forecast customer design preferences and sales volumes well in advance.
    "You're locked in," says CEO Dan Shimek. "You might buy the wrong inventory that moves slower than you'd like."
    By moving manufacturing of fire pits and some outdoor shelters to the U.S. the past year, the company now can place orders just three months in advance.
    Onshoring also has been a boon for suppliers. Three supplier trade groups joined forces last year for a marketing campaign to push manufacturers to bring production back to the U.S.
    "I'd like to reduce the amount that's offshored by 30% to 40%," says Harry Moser, a former machine tool executive who conceived the effort. At a May trade fair in Irvine, Calif., 18 of 28 manufacturers that attended asked suppliers for quotes on purchases they would like to switch to U.S. sources.
    Sales for vehicle gear supplier Morey are up 70% over last year as makers and fleet managers shift purchases to the U.S., says Vice President Taymur Ahmad.
    Morey, which makes devices that track vehicle location, speed and maintenance data, has hired 110 employees at its Woodridge, Ill., plant since October.
    "I'm getting business that's unprecedented," Ahmad says. "And it's all from customers that are looking to buy locally." so the mens timberland 6 inch boots are the unimportant factor,you may have a look.

 
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