THE VALUE OF RESHORING MANUFACTURING TO THE USA:
– From the perspective of a Small Business & USA Manufacturer –
To be a small business owner in America, you must be one of the dreamers; one of the risk takers who work hard everyday to maintain a business legacy and pave your own way. Those are the principals that led Carey Manufacturing to the path of ‘Made in the USA’. At Carey, the values that are ingrained in our company culture include supporting our local economy, creating jobs and providing exemplary service to our customers. In the early 2000’s Carey was outsourcing majority of production to China. In 2015, philosophy met opportunity when our owner Jack Carey discovered the German-owned machine manufacturing business, Trumpf Inc., right in the neighboring town of Farmington, CT. One multi-million dollar investment later and Carey Manufacturing now makes 80% of our catches, latches, handles and case hardware right at our 30,000 sq. ft. facility in Cromwell, CT.
Unfortunately, in business you cannot make a large investment just based on personal philosophy; it is important to also weigh the benefits and challenges of the decision. That being said, you might be wondering.. what are the benefits of reshoring manufacturing to the USA? First of all, we were able to take control of our products and designs. We can assure high quality hardware and have the flexibility to be innovative with customized and tailored products for individual customer demands. Another benefit is the improved efficiency of our lead times. Reshoring our manufacturing turned a 18-26 week lead time from China to 8-10 weeks. (See the video below for more on how reshoring has improved our lead times)
With many of our customers located right in the U.S., our close proximity to them and our suppliers is instrumental to the service we provide. An in-person visit in many cases, is just a car ride away for our sales representatives and this has made all the difference when making a strong connection. Branding opportunities are another unique benefit of the reshoring process. For our customers the “Made in the USA” brand translates to dependable, trustworthy, high-quality and tariff free. We look for customers that are dedicated to supporting their neighbors, who are forging a path right here in the States. At Carey, we proudly support our economy and the creation of 10 jobs since the beginning of our reshoring process. Gaining these positive outcomes is what drove the initial investment in 2015 and it is what continues to drive us today.
When Carey Manufacturing began the reshoring process there was no instruction manual to follow. Although the benefits kept us committed, there were definitely no shortage of challenges to face. Prior to 2015, the manufacturing base was diminished and so the establishment of a full manufacturing ecosystem proved to be quite onerous. Outside of catches, latches and handles we also own the brand Amatom which includes a full line of electronic hardware products from standoffs and spacers to electronic handles and captive panel screws. Unlike Carey, Amatom has always been ‘Made in the USA’, and so we were faced with the challenge of sharing production time between the two brands. This took trial, error and an ‘all hands on deck’ approach from our dedicated team, in order to learn the best way to manage the demands of both brands on the manufacturing floor. Financing also proved to be an obstacle in reshoring. In our experience, the cost for new capital equipment is high and private banks are opposed to risk. This reduces financial resources for small businesses who may require 5-6 years to see a return on investment. On the contrary, despite the fight for financial resources, this process started in 2015 and we continue to serve our customers 5 years later.
Another challenge was the lack of experienced tool makers between 35-55. Many manufacturers today are facing a graying workforce and with retirement for many on the horizon, there is a struggle to find workers with the same level of experience to take over. At Carey, we address this workforce development issue tactfully. We maintain a close relationship with local Technical Schools, host tours, and attend job fairs plus other local manufacturing events in order to support the up and coming workforce. We will then hire young manufacturers to take on an apprenticeship under our seasoned and most experienced tool makers. From this planned sequence we have gained many new, skilled workers who are making their mark on the factory floor. Finally, we make sure to keep an open line of communication in voicing what we need from our employees to those who actually create the curriculum, by taking seats on multiple Technical Advisory Boards. Overall, we are fully dedicated to supporting our industry’s workforce; an incredibly necessary pursuit for all who look to continue building a ‘USA Made’ Manufacturing facility well into the future.
You can't discuss reshoring without bringing up the impact of the trade environment. Trade agreements & Tariffs (especially in today’s climate) keeps us on our toes to say the least. In 2018, the trade war between the USA & China began, in which tariffs were placed on raw material imports. This resulted in an increase on domestic demand and thus our cost at Carey Manufacturing increased 25-30%. Come 2019, tariffs were then placed on finished goods. This resulted in a 25% increase in cost on China made parts, evening the playing field. At Carey Manufacturing we began to see an increase on quoting, orders and overall interest. We are hopeful that we will continue to see more businesses turning towards USA Made manufacturers in the near future. Since government decisions can vastly impact our business, we aim to do our part in influencing government support of U.S. Manufacturers by continuing to advocate when we can. This includes attending events at our State Capitol, meeting with local Representatives, speaking at public hearings, participating in case study’s and overall just lending our voices and experience wherever we can. Reshoring our manufacturing and becoming ‘USA Made’ is truly a reflection of Carey Manufacturing’s identity and it is something that we are proud of.
by, Cierra Green, Business Development Specialist, Carey Manufacturing Inc. & Amatom Electronic Hardware
Thank you Paul Lavoie, Jack Carey and the SelectUSA Case Study for providing insight and information for this blog post.