Fore!

Or perhaps we should we say 前面!  After all, just about all golf clubs are now manufactured in either Taiwan or China.  The April issue of Golf Digest has a lengthy article that describes this rather recent change, especially the manufacturing aspects, in considerable detail.

To many in golf, the emergence of China as the country of birth for nearly all golf clubs seemed to happen that quickly. That statement has the quality of being overly simplistic and entirely accurate at the same time.

One company alone, Fu Sheng, makes over a million clubs a month from operations in Taiwan, China, and Vietnam.  Although the moving of club manufacturing to Japan and then to southeast Asia began as a result of the usual suspect, labor costs, those manufacturers are now providing top quality and full R&D services.

The confluence of the Information Age and the Chinese Century has revolutionized manufacturing and accelerated innovation. New ideas can become reality in days, not months or years. In fact, as one U.S. club designer says, "Anyone with a fax machine and a couple thousand dollars can be in the equipment business."  Even more impressive is the speed with which an idea can matriculate through the system, making it possible for the biggest companies to launch two or three new drivers a year, just as TaylorMade and Callaway have done recently.

But before we consider this to be yet another example of outsourcing lemmings who don’t understand the total supply chain cost of their products, we need to remember that over 75% of new golf clubs are now sold to customers in Asia.  So companies like Calloway and Taylor Made are now getting closer to their customers, which as we’ve mentioned before is one of the only real reasons to outsource.  By coupling top technology titanium casting  capability and rapid prototyping, these new manufacturers are delivering value to their customers.

It is the rapid emergence of Chinese golf manufacturing, and especially their almost immediate conversion to full-service suppliers that is interesting.  The problem continues to be intellectual property protection.  Processes, such as extreme thin wall titanium casting, are developed at R&D centers in the U.S. and then transferred to the Chinese manufacturer.  However it is known that that new technology is then immediately available to others.

"Really, we split the cost of running the business: The vendors invest in equipment and manufacturing, and we invest in design, marketing and sales," says [Taylor Made CTO Benoit] Vincent. What’s left unsaid, of course, is that once a unique process is developed–say, thin-wall casting–other companies begin using it.

That new technology and capability is then used to help second and third tier golf club designers directly, in effect creating a situation where the big brands are subsidizing the small ones.  Fu Sheng alone has 16,000 employees working on golf clubs.  And contrary to the perception that they are simply a cheap labor sweatshop, they are implementing lean manufacturing concepts to further improve efficiency and capability.

In addition to its titanium-casting operation in Taiwan, which features a core of engineers working to discover new ways of casting metal at thinner levels, the Fu Sheng approach under P.Z. has been to innovate the scattershot club-assembly process frequently found in Asian factories. By keeping products flowing in self-contained, U-shape sections–hundreds of these sections, it seems–Fu Sheng has set the efficiency bar even higher.

Competition is increasing among the different tiers of Asian club manufacturers, with the smaller companies carving out profitable niches by offering specialized services.

"You have to do things differently, provide different services," says Hribar. "We can work with a client and show them immediately how slight design changes impact performance because of our test center. We can become part of the design process right from the start of a product."

A considerable amount of original design, especially on the process side, still happens at labs in the United States.  And the U.S. is home for numerous custom club manufacturers, with that same issue of Golf Digest having an article on just such a company making a go of it from Colorado. 

The large companies are manufacturing the majority of their clubs in Asia for Asian customers, but the U.S. market is still over a quarter million clubs per month.  The R&D and rapid prototyping capabilities of those companies still require almost 10 months to get a new club to market in the U.S., presumably due in large part to the ocean transit components of their supply chains. There should be ample opportunity for smaller companies with faster turnaround to capitalize on part of the domestic market.