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Outdoor product manufacturing shifting, but not all back home

As labor costs continue to rise overseas, particularly in China, there is talk of whether that could spur a return of manufacturing to the United States. SNEWS learns there is a shift underway for the outdoor industry, but it isn't all coming home.

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As labor costs continue to rise overseas, particularly in China, there is talk of whether that could spur a return of manufacturing to the United States.

Back in the 1980’s the ‘Made in USA’ tagline centered on jobs and national pride. Today, the theory revolves around being more sustainable and protecting intellectual property.

Several outdoor companies are laying out plans to manufacture products again in America – even if it’s just a SKU or two.

But some in the outdoor industry say the recent push to manufacture at home is today’s version of green washing. It can’t and won’t happen overnight – rather it will take decades, and until then the claim remains a mostly marketing ploy.

Others say the real shift for the future of manufacturing won’t be ‘Made in USA,’ but rather ‘Made in market’ – reconnecting production facilities to design and management offices, wherever in the world that may be.

Coming home

“As we continue to expand sales internationally, on the manufacturing front we have for the first time in a long while brought manufacturing of two of our product lines back from Asia to the United States,” Martin Franklin, CEO of Jarden Corp., parent of Marmot, Coleman, K2 and Volkl, recently stated in the company’s first quarter earnings report. “I believe that we are witnessing the end of a 30-year trend of relocating manufacturing, and therefore jobs, from the Americas to Asia.”

Jarden officials did not return a request for further comment, but the company isn’t alone in putting out recent press materials about bringing some manufacturing home. Outdoor companies like Patagonia and Nemo have told SNEWS® they plan on soon debuting limited numbers of ‘Made in USA’ products.

It’s not a marketing ploy, they said, but a curiosity to see if it can be done. What are the real costs and savings in quality, service and bottom-line profit?

Footwear maker Keen Inc. is finding out. In October 2010, the company opened a new 15,000-square-foot production facility (pictured right) less than five miles from the company’s headquarters in Portland, Ore.

The hometown factory represents less than 2 percent of the company’s manufacturing – among other things making the soles for Keen’s NoPo casual boot and then attaching the leather uppers, which are still shipped in from Asia.

There isn’t a cost savings, said Kelly Wallrich, Keen’s vice president of products – it’s about 20-30 percent more expensive to manufacture here – but the gain comes from having the factory in Keen’s backyard.

“The development team can test the products locally,” she said. “It’s also a great educational facility for us.”

One of the biggest disadvantages companies face when manufacturing abroad is the distance disconnection between its designers and the production process. Having a local factory, albeit small, allows Keen designers to test their new ideas immediately at home, speeding research, rather of going back-and-forth overseas. Another advantage is to keep the company’s latest intellectual property close to the vest, she said.

Made in market

Reconnecting design to production is just the first step for the future of manufacturing, Cascade Designs Inc. President Joe Mc Swiney told us. There also must be a reconnection between manufacturing and company leadership, sales, distribution and consumer consumption.

Cascade Designs, parent company of outdoor brands Therm-A-Rest, MSR and Platypus, conducts 80 percent of its manufacturing at factories in Seattle and Ireland because the United States and Europe are where a bulk of its customers are.

“We’re not a ‘Made in USA’ company, we’re a ‘Made in market’ company,” Mc Swiney said.

As its customers rise in Asia, then “it’s only a matter of time” before Cascade Designs will open a similar presence there, Mc Swiney said. Not just production, but top-notch local designers and management that are a fully part of the company.

“It’s about local control,” he said. “You are able to make products that are to a quality standard that can’t be duplicated… because we control the process.”

Ensuring quality

For Teko Socks, the decision to produce a new sock in North Carolina with 100-percent North American merino wool, blended with polyester sourced from recycled water bottles from the South, wasn’t so much about creating a “Made in USA” story, as much as it was about ensuring quality.

“People expect quality, first-class socks from Teko, said communications director Don Gladstone. “That’s why we’re committed to the U.S.”

The new Teko S3 sock collection is the company’s first featuring non-organic wool and a blend with polyester, so it wanted to ensure quality. The U.S. South is known for its quality sock mills.

The decision to locate production of the socks in North Carolina then dictated the decisions to source the sock’s materials locally, he said. With the merino wool and polyester coming from within 300 miles of the factory, it reduced transportation costs.

Made in… Bangladesh

Whether it’s being driven by production quality, costs, or control, global manufacturing will continue to shift for the outdoor industry. But don’t expect it all to come home.

For the broader market, Mc Swiney sees a rediversification of the supply chain ahead rather than a flip back to the United States. As China becomes a first-world country with higher labor costs, other emerging countries such as Vietnam and Bangladesh will take its place for inexpensive manufacturing. Not necessarily a bad thing, he said, because with each shift, the jobs created will help lift another country’s economy and standard of living.

— David Clucas