Manufacturing is making a major comeback here in the U.S. This is being accomplished through faster machines, machines with more automation and reduced changeover time, and through a highly talented and diverse workforce. The realization is that competition is more than just labor dollars, it's about being efficient.
At my sporting gear company, Orange Mud, we focus on sourcing our labor and materials as much as possible within 150 miles of our facility in southern California. This helps to reduce transit time and cost, and fix problems quickly if they come up.
Sourcing local may take a bit of work, but just compare that to the seven days it would take to fly overseas and manage a supplier. Focus on your domestic options instead—you might be surprised at what you can achieve. Below are a few more reasons why sourcing local has been a big benefit for my business.
1. It Gives You Control Over Your Materials
All materials are not created equal. The upside to U.S.-made materials, or at least those purchased from U.S. importers, is that there are more industry standards the materials are often held to. This leads to a lot greater comfort for you that the material you specified is, in fact, what you received.
2. It Reduces Minimum Buys
Our local suppliers are still interested in our business, even if we're only ordering a small amount. Need a container full of locally-sourced goods? Great! It's called a semi-truck and shipping is cheaper when your product is being delivered from a local source.
3. It Allows for More Customization
Cheaper product is often due to sheer volume. Labor outside of the U.S.A. is more inexpensive, but talented labor overseas can be more limited. Hence why most companies want huge volumes to justify one high-end person setting up the process, then lower skilled worker bees making the widgets. Making products locally often means you work with a more robust and diverse talent base that can handle the smaller batch work that many small businesses require. For Orange Mud, that means more color options with smaller builds. If something doesn't sell well, it's OK—it will still sell out eventually.
4. It Gives You the Opportunity to Discount Less
When you source local, you buy what you need for a quarter or six-month basis, not one to two years. This has kept our batches small, so we always sell out of a line without having to majorly discount at the end of the life cycle. This is good for both brand value but also our retailers as they are not faced with heavy and frequent discounting with seasonal changes.
5. It Helps You Offer Better Prices
Making our products in the U.S.A.is surprisingly competitive. We've found one of our products that no one outside the U.S. has been able to beat thanks to automation and creative minds. To be fair, actual product prices were close overseas, but duties, shipping, plus high minimum buys lost the edge. Be sure to look at all costs, not just the finished product, before cutting a PO.
6. It Doesn’t Only Limit You to the U.S.
Local isn't just the U.S. Mexico has stepped up to the plate in a big way. We often split build projects, where our local suppliers will cut all the materials for an order to ensure consistency. After that, they send the big volume to their Mexico plant for assembly, then bring the materials back for the final touches and inspection. New launch, rush orders or small product builds within the same family will only be made locally. Typical labor savings in Mexico for my company is around 40 to 45 percent.
7. It Helps You Get to Market Faster
Our local manufactures run a typical queue of four to six weeks for U.S.-made goods, while Mexico takes eight weeks. Local shipping is usually one day. Most overseas builds average 8 to 16 weeks, then ocean freight takes anywhere from two to four weeks, plus customs clearance time. Port issues like labor strikes, foul weather, customs clearance and more can delay this exponentially longer. How would your business be impacted if product that was due in today came in three months late?
8. It Means Less Paperwork
Going overseas adds a great bit of complexity in customs paperwork, which varies widely by country. Most companies hire a broker to manage this for them, as mistakes may not only delay your shipment, they can cost you more in duties, too. Sourcing local is often as simple as an invoice.
9. It Makes Dealing With Problems Simpler
Manufacturing isn't perfect. Humans will be, well, humans. We all make mistakes and as a result, most industries are impacted by simple human error. Can you imagine receiving 20,000 units of defective product? Now what? Hop on a plane across the ocean and find resolve while your product is slow-boated across? When you source locally, you don't have to worry about those travel issues.
Sourcing local is often marketed as providing a great benefit to your community—which it does. But it's more than that. Reducing time to market, maintaining design control and finding a competitive price may be easier than you think. Next time, give a local company a chance. You may be surprised at the result.