Is domestic manufacturing still relevant?

We all use imported products, and it is clear that they now have a strong-hold on a segment of the market and a deserved place in your warehouse. Certainly, the global economy has made it easy to purchase foreign goods, often at a lower purchasing cost from that of a similar domestic product. It is easy to see the appeal of a cheaper product, particularly when we are all fighting for the same customers. Cheaper raw materials might mean higher margins, or a bigger market share through a lower price point. Or do they? It might be time to reconsider the value of domestic products, and re-evaluate their place in our manufacturing processes.

How much of your valuable warehouse space is required to inventory material "just in case" a ship is late? More than a month after major Korean freighter line Hanjin shut down due to financial issues, the effects are still being felt by retailers in terms of shipment delays from Asia.

How much money is tied up in inventory, or material that has shipped but has not arrived? Ashley Furniture and Hanjin Shipping will face off in a federal bankruptcy court as the two companies battle over unfulfilled payments by Ashley Furniture due to the carrier's post-bankruptcy disruptions, the Journal of Commerce reports. This is hardly the first time that product from overseas has been held due to logistic problems. Remember the West Coast port slowdown during the labor dispute of 2015?

How much money is invested in quality checks, due diligence of certifications, and accuracy of product specifications? Regardless of whether Lumber Liquidators was at fault or not, the fact is that the negative publicity and cost to the company, shareholders, and consumers was tremendous.

How nimble are you to respond to unique requests for special products that might be required of a non-standard custom job?  According to participating members in the Kitchen Cabinet Manufacturers Association’s monthly Trend of Business Survey, cabinet sales for September 2016 increased +0.6 percent compared to sales for September 2015. The growth was mainly in custom orders. Stock cabinet sales decreased -2.4 percent; semi-custom sales increased +3.0 percent and custom sales increased +4.8 percent. The year-to-date sales show an increase of +5.3 percent with stock sales up +4.0 percent, semi-custom sales up +6.0 percent, and custom sales up +8.4 percent.

Partnering with a domestic supplier certainly has the advantage of shorter lead times, reduced inventory requirements, and the flexibility to tackle any project. In addition, you can feel good about protecting the work environment and the planet with sound and verifiable safety protocols, work conditions, and environmental practices. After considering all these factors the utilization cost of domestic products might be much lower than originally estimated. The icing on the cake is that you will be providing, and securing, much needed jobs at home.

If you are already sourcing imports as well as domestic products - good for you. But if you are single sourcing or highly leveraged to imports, consider re-introducing domestically manufactured products into your supply mix. The end result might just be a win-win situation for all of us that make a living out of manufacturing and selling products in the United States.