The trend of “reshoring” manufacturing showed up in my back yard last week, with a story in the Alva Review-Courier about local business Vantage Plane Plastics.
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| Vantage Plane Plastics in my hometown, Alva, Oklahoma, is competing with China for manufacturing jobs. |
Another Oklahoma manufacturer had planned to outsource their product to China, when a sudden increase in shipping costs derailed that plan. Vantage took on the project with a much lower minimum order, saving the original company money. Vantage saved them even more money by catching and fixing a design flaw. If the job had been done in China, the entire container load would have had to be scrapped.
Outsourcing manufacturing to China and other countries is becoming less competitive, and spells opportunity for local custom manufacturing firms. Hourly wage rates in China sound attractive, but are not the only cost factor. In this case, the shipping cost, the lower minimum order, and saving $290,000 in scrapped product, all made Oklahoma more than competitive with China.
Thanks to the Oklahoma Manufacturing Alliance for writing the original story and giving me permission to share a few excerpts here.
Tim Hartman, of PTO Productions, LLC, of Edmond, Okla., was helping Fun Sports Products, Inc. to manufacture and market The Shutout Mound, a plastic pitching mound used to train pitchers.
“We were just about to approve the manufacturing deal with China when they increased our shipping cost,” Hartman said. “The revised shipping cost for a container load caused us to hold and re-evaluate.”
Vantage General Manager Mark Seaver offered several advantages to his local production over outsourcing to China.
“Same material, same product, lower minimum-volume requirements, and no need to put all of our money out there at once,” Hartman said. “They handle the warehousing too. Mark provided us a one-stop solution.”
Oklahoma Manufacturing Alliance Extension Agent Kevin Barber said, “The less visible costs of manufacturing overseas like managing additional inventory in the shipping lanes, managing quality issues, and maintaining good relationships with your foreign manufacturers are very real and make manufacturing in Oklahoma an attractive and feasible alternative.”
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Becky started Small Biz Survival in 2006 to share rural business and community building stories and ideas with other small town business people. She and her husband have a small cattle ranch and are lifelong entrepreneurs. Becky is an international speaker on small business and rural topics.
