By Kevin Meyer
Over the last several months we've been writing about how the outsourcing lemmings have woken to the reality of their nonsense and have started to return to North America. Supply chain costs and delays, quality, intellectual property, speed of innovation – all real costs of offshore outsourcing that are often missed by traditional accounting. If you look hard enough, you realize that labor is only a fraction of your operating cost – the impact of unnecessary waste is the largest portion. By focusing on reducing that waste you learn that the only real valid reason to move offshore is to be closer to an offshore customer.
Furniture and apparel were two industries hard hit by the offshore outsourcing frenzy, although we've often written about companies that have stuck it out and thrived in North America. Now thanks to regular reader Craig we know of a few more who have realized the error of their ways and are returning.
In the past decade, competition from overseas has nearly eliminated
U.S. domestic bedroom production. Except for a handful of niche
producers, the category has shifted almost entirely to Asia.
to a variety of factors, from rising Chinese labor costs to labor
shortages in Asia, some big importers have brought some bedroom
production back to the United States.
Those same factors – rising labor costs, unexpected supply chain costs, the general cost of losing control. Thomasville Furniture is one example.
Officials estimate that the about one third of Thomasville's case
goods mix is made domestically, up from about 20% two years ago. The
shift makes sense partly because of issues such as rising costs for
freight and overseas labor, combined with ongoing labor shortages in
parts of Asia, said Thomasville President and CEO Ed Teplitz.
"We are poised for growth," he said. "There may be an opportunity to
step up and bring more (production) back here."
To be honest it's fairly tentative at this point, but it's headed in the right direction.
Sister company Broyhill is producing a domestic bedroom called
Chatham Place in Thomasville's Lenoir plant. Launched last fall, this
solid cherry group also has clean-lined elements that make it
cost-effective to produce in the U.S.
"It was a natural fit for the marketplace for it to be made in their
plant," said Broyhill President Jeff Cook, adding that the
made-in-the-USA factor appeals to some customers. "It is retailing
Thumbs up guys. Now start to dive deeper into your true costs and I bet you'll realize there's a lot more real waste that can be pulled out of your operations – and it will make sense to bring more back.