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Onshoring as a Reality

There’s quite a bit of skepticism about claims of onshoring taking place in the United States. And rightfully so! When you look at the shell of what were once great manufacturing industries in the United States, it’s hard to believe that onshoring is taking place. When you drive through the vacuum of what was once thriving manufacturing sections of Los Angeles, you can’t help but second guess any politician’s claim to the return of American manufacturing.

Of course, when you look at the drain of manufacturing jobs over the last several decades, you’ll really understand how unrealistic it is that manufacturing jobs are being created in the United States. More importantly, when you look at the lack of industry that we have in place, it isn’t a pretty picture. There’s not going to be a massive flood of manufacturing jobs coming back to the United States anytime soon.

The difference between the myth of onshoring and the reality of onshoring is that the reality of onshoring takes a tremendous amount of work on the part of business management. Were I not the GM at my company, we certainly never would have onshored the manufacturing of our patent pending quick zip belt. Everything we knew about manufacturing was based in China. The first conversation of manufacturing the product in the United States was very quick: “There’s no way you’re going to be able to manufacture this product in the United States for anywhere near what it costs in China.”

For more than half of 2011 I drove all over Los Angeles, emailed all over the country, and made phone calls to countless resources to figure out how realistic onshoring was going to be. While it is now a reality, it wasn’t looking very promising for the first couple of month. It was long hours, late nights, frustrating conversations…

The bottom line is that the information that’s available for finding manufacturing resources in the United States is sparse at best. So much manufacturing has vacated America that you’ll find more disconnected numbers these days than companies open for business. It can be discouraging, especially when you find that even industry trade organizations are going out of business. If you have non-profit trade organizations going under, it’s going to make it tough.

When evaluating the potential to onshoring, there are a couple of things to always keep in the foreground of thought. First, costs are going to higher but not as much as you might think. Second, you don’t have to go swimming in the onshoring pool. You can get your toes wet one part at a time. Perhaps there are some parts that aren’t realistic to make in the United States right away (plastic and metal part tooling is RIDICULOUSLY expensive in the United States! And by RIDICULOUS, I mean 5000% more expensive in most cases than China).

Finding raw materials in the United States isn’t always as easy as doing a search on Google or trying to find an industry trade resource. Like I mentioned earlier, many of them are closed. However, raw materials in the United States aren’t going to be significantly higher than they are in China, and usually you’ll find better quality. In my case of looking for leathers, I found leathers that I can’t even find in China. In fact, I’ve even designed a version of the belt that can’t be replicated in China because the raw materials just aren’t available there! By the time the raw materials were exported to China, it wouldn’t be cost-effective to manufacture this other design in China because the labor savings would be offset by the material logistics costs.

Speaking of labor savings, that’s really where China has the US beat. Hands down, it costs significantly less for a worker in China to perform the same work as a worker in the US. While people often point to quality, it’s important to note that there are some TOP quality products being manufacturing in China. That being said, there is a stable of manufacturing knowledge that does exist in the United States that just doesn’t exist in China. The factories I work with for my belts have decades and decades of experience, even multi-generational experience! That’s very hard to find in China, and will be hard to find in Vietnam (where so many are looking to manufacture now that costs in China are skyrocketing).

Manufacturing my particular product in the United States brings about a much higher manufacturing quality, material quality, and over all value to the product. While we can still manufacture in China, the version of the product that can be manufactured in China is nowhere near the value of what we produce now in America. Of course, in the world of fashion accessories, it’s not just about how it looks! Quality of manufacturing make the difference between a belt that lasts you a lifetime and one you’re throwing away in 3 years.

Ultimately, onshoring is entirely feasible and has tremendous benefits.

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These Days Everything is Made in China, Right? Not Quite!

Step into a casual conversation with someone about the economy, and it’s not uncommon to hear someone say “Everything is made in China”. Looking on the bottom of half the items you purchase at the store (even grocery stores are selling items from China) you’ll discover a “Made in China” sticker or engraving on the product. It would seem that “Everything is made in China” is an observation of the truth. Yet it isn’t.

I’ll digress for a moment… My company does a great deal of manufacturing in China. So, after developing a new product, we didn’t consider anywhere else but China for our manufacturing. The idea of Korea, Vietnam, Guatemala, or any other country wasn’t on our mind at all. We have established relationships with factories and suppliers in China. We have agents in China that perform our quality control. It’s just the natural choice.

Delay after delay after delay soon had me thinking that something wasn’t quite right with our choice of factory, so I set out to do some research into the materials we needed. During the process, I found that the United States had a massive manufacturing industry. In fact, US manufacturing as of 2009 is still larger than China by $200 billion! To top it off, the apparel industry (which is what our new product is) was the largest manufacturing industry in the United States! My mind was ablaze with opportunity…

At the center of the US apparel manufacturing industry? Los Angeles (and New York). I found countless pointers to the California Market Center. Fashion shows, trade shows, manufacturing resources, suppliers… Everything was right here in Los Angeles, and my timing couldn’t have been more perfect. The LA Textile Show was just a week away!

Fast forward to the Textile show and mountains or research, phone calls, Internet searches later… I found the suppliers of the materials I need for our new items but what about the finisher? Fortunately, I found Fashion Business, Inc, a non-profit resource for the fashion industry in the United States. They had a couple of seminars they were doing during the LA Textile show that were right up the alley of what I was looking for, and the material suppliers at the show were very helpful as well.

The materials (of which I could choose American, Italian, and any other sources) were at the ready. There was no 30 day wait like I had with my China factory, and the materials were genuine leather as opposed to the bonded leather product we were being sold as genuine leather in China (a costly endeavor I’ll save for another blog). Finding a finishing company that was still in business was going to be hard to come by, but I was feeling quite positive about manufacturing a product in the United States! Especially one made with all US materials!

I made an appointment with a belt finishing company in Los Angeles (one of less than a handful left from an industry that used to be filled with competition). As soon as I walked into the LA location and showed them the belt… “We can’t make that type of belt. We don’t have the ability to make feathered edge belts in the United States.” Uh oh… But I wasn’t going to stop until I had checked every single belt finisher off my list!

Finisher after finisher had the same story. We don’t have the ability to do that here. I had a very memorable conversation with a finisher in New York:

Jared: I have a leather belt I’d like to make here in the United States

NY: Why?

Jared: I want to manufacture a belt in the United States, use US materials and US labor. Put people to work here. There are half a dozen more reasons I can give you.

NY: Well, it’s going to cost you a lot more than China.

Jared: I know. I’ll worry about that with my pricing, and I have a very unique product so it’s a bit different from the run of the mill belt. However, I have to tell you that I have a unique men’s belt, and I want a feathered edge.

NY: Feathered edge? We can’t do that. Nobody in America can do that. Good luck (click)

I’ll admit that I was a bit disheartened by the weeks of searching for a finishing company only to be told that my particular want is not possible by half a dozen of the dwindling field of belt factories in the United States. I even went about changing the product to a more casual design that would not require the feathered edge. I really wanted a US made belt!

I’ll admit that I’m pretty happy that all this happened. I developed a new casual version of our product that is amazing, and I did eventually find the perfect finishing company that can make both the beveled edge and feathered edge belts. They are even providing a great wealth of knowledge and resources for future designs, leathers, and other materials that will help expand the belt line.

US manufacturing is not dead. It’s struggling and merely a shadow of itself. However, when I consider the continued rising costs of raw materials on an international level, the skyrocketing costs of fuel and freight charges for products manufactured in China, and the constant problems we had in particular around this belt… Made in USA is the clear direction and entirely possible! The quality of the product is better. The turn around time is much faster. The ability to launch new styles and materials is much easier. There are a myriad of benefits from “onshoring” the production of this new product!