As we mentioned recently on this blog, it is commonly believed that much of U.S. manufacturing has moved overseas in search of cheaper manufacturing alternatives. And while it’s true that many companies outsource, we hear about new and innovative U.S. manufacturing organizations almost every day.
Take Timbuk2 Designs, a custom bag manufacturer based in San Francisco. Timbuk2’s innovative 15-person team is a great example of a U.S. company that cuts costs by manufacturing in-house. How do they do it? Their entire team is cross-trained to use any machine—allowing them to produce up to 400 customized bags a day—and most importantly, they are hyper-focused on developing business in their own backyard.
How U.S. manufacturers are cutting costs by going local
According to The Atlantic, Timbuk2 is not the only company embracing the “go local” trend. An estimated 200-300 businesses in San Francisco alone are driving profits by focusing on local customers. And recent research by Accenture found that 61 percent of the manufacturing executives they surveyed have considered shifting their manufacturing operations to be closer to where demand for their goods and services is highest.
What do local manufacturers have in common that helps them thrive? Kate Sofis of SFMade—a non-profit dedicated to supporting and growing manufacturing in San Francisco—suggests that successful “local” manufacturers tend to “[be] consumer-products companies [that are] design-driven, intensely customer focused, increasingly sell direct, and often marry technology in their business model.” In other words, these new local businesses tend to be innovative, concerned with the customer experience and able to design products that incorporate readily available, local materials. The combination of these qualities facilitates speed-to-market, which is important to consumers.
In locally-focused businesses, product designs—and even some internal organizational operations—are strongly driven by local materials and the wants and needs of the people who buy and use the goods. These local companies can produce limited qualities of product inexpensively and follow up quickly when ideas are a success. Because there is no wait time for scheduling production and sourcing materials abroad, the time-to-market is significantly reduced. Timbuk2, for example, can manufacture a fully customized bag and ship it to its new owner in as little as 2-3 days. For customers who’d prefer to drop by their San Francisco store, orders can be fulfilled and picked up the same day.
Is “local” the next big thing?
With all the benefits of adopting a local focus, it’s not surprising more U.S. manufacturers are setting up shop and achieving success in their own cities. And if the desire for readily-available custom products continues to grow, local could be where the U.S. manufacturing industry makes its comeback.