The following is an excerpt from an article I recently read in the Wired.com magazine titled, "Made in America: Small Businesses Buck the Offshoring Trend". Although the article is about an American company, it could just as easily apply to my Canadian company, Tail Wags Helmet Covers. If you'd like to read the article in its' entirety, please visit: http://www.wired.com/magazine/2011/02/ff_madeinamerica.
In early 2010, somewhere high above the northern hemisphere, Mark Krywko decided he’d had enough. The CEO of Sleek Audio, a purveyor of high-end earphones, Krywko was flying home to Florida after yet another frustrating visit to Dongguan, China, where a contract factory assembled the majority of his company’s products. He and his son, Jason, Sleek Audio’s cofounder, made the long trip every few months to troubleshoot quality flaws. Every time the Krywkos visited Dongguan, their Chinese partners assured them everything was under control. Those promises almost always proved empty. As he whiled away the airborne hours, Krywko made a mental list of all the manufacturing glitches that had nearly wrecked his company. There was the entire shipment of 10,000 earphones that Sleek Audio had to discard because they were improperly welded, a mistake that cost the company millions. Then there were the delivery delays caused by the factory’s lackadaisical approach to deadlines, which forced the Krywkos to spend a fortune air-freighting products to the US. Even when orders were produced on schedule, Krywko wasn’t too pleased with the situation: The company always had precious cash tied up in inventory that took months to arrive after the prototypes had been approved. The headaches had finally become too exasperating to bear. And so, on that flight, he turned to Jason and said that he was done with Dongguan. “I can’t do it anymore,” he said. “Let’s bring it home.” Jason had been thinking the same thing. When the Krywkos returned to the US, they searched for a manufacturing partner with the tools and expertise to produce their earphones. They found one just a few miles away from their Palmetto, Florida, headquarters: Dynamic Innovations, a maker of ruggedized computers and other equipment. Sleek Audio quickly signed up. Today, a year since Krywko’s decision to go against the offshoring tide, Sleek Audio has a full-scale manufacturing operation that can be reached via a 15-minute car ride rather than a 24-hour flight. Each earphone costs roughly 50 percent more to produce in Florida than in China. But Krywko is more than happy to pay the premium to know that botched orders and shipping delays won’t ruin his company. And so far, the gambit appears to be paying off: Based on enthusiastic customer response, Sleek Audio is now projecting 2011 to be its most profitable year ever. For US firms, the decision to manufacture overseas has long seemed a no-brainer. Labor costs in China and other developing nations have been so cheap that as recently as two or three years ago, anyone who refused to offshore was viewed as a dinosaur, certain to go extinct as bolder companies built the future in Asia. But stamping out products in Guangdong Province is no longer the bargain it once was, and US manufacturing is no longer as expensive. As the labor equation has balanced out, companies—particularly the small to medium-size businesses that make up the innovative guts of America’s technology industry—are taking a long, hard look at the downsides of extending their supply chains to the other side of the planet. The US certainly isn’t on the verge of recapturing its past industrial glory, nor can every business benefit by fleeing China. But those that actually build tangible goods should no longer assume that “Made in the USA” is an unaffordable luxury. Unless a company is hell-bent on selling the cheapest goods possible, manufacturing at home makes more sense than it has in a generation.Tail Wags is a proudly Made in Canada product. Of course, people are always commenting that I could easily make more money if I decided to mass produce in China. But the costs of overseas manufacturing in terms of poor quality, delays in production, high shipping expenses as well as the risk my product designs will be copied are too high! Besides profit, although important in any business, is not the only motivating factor for Tail Wags. I feel an incredible amount of pride knowing Tail Wags products are well-made, promote the use of safety helmets, and are 100% locally made! Do you actively seek to buy North American made products? Of course, with current high unemployment rates, there is a growing awareness that buying locally made products supports the local economy and, hence, local jobs!
Share this post
- 5 comments
- Tags: Business, Canadian Made Products, Consumerism, Entrepreneur, General, Overseas Production, Supporting Locally Made Goods