The Lure of Manufacturing in the U.S.
Through its commitment to buy U.S.-made products, Walmart is leading the charge to encourage and help both U.S. and foreign manufacturers to set up operations on U.S. soil.
Location USA 2016
“It was a perfect storm. You had steel, aluminum, oil, plastics, ocean freight, currency — everything at one time going up,” Kamler said. “I spent about six weeks traveling all over Asia, asking myself, ‘If not China, then where?’ The answer seemed to be nowhere for bicycles. The idea in the back of my mind was that maybe one day we could do it here in the U.S.”
In March 2013, Kamler met South Carolina Gov. Nikki Haley at Walmart’s U.S. Manufacturing Summit. The two began discussing the possibility of Kent opening a factory in South Carolina, and since then, the company has invested $4.3 million in a new assembly facility in the small town of Manning, South Carolina. By the end of 2016, Kent will produce 500,000 bicycles. And another great number? Kamler estimates that the factory will bring up to 175 jobs to the area. They are also in discussion to grow their U.S. production even further. The bikes they make are the first U.S.-assembled bicycles sold at Walmart in more than a decade.
The U.S. is a very competitive place to manufacture for many consumer products. Kent has sold bikes to Walmart since 1997, and we’re proud of this new endeavor. While both of us are excited to bring these bikes to our customers, we all agree that in the end, the numbers must also make sense. With Kamler’s entire career spent in the bicycle business, he has the experience to make a confident decision in this area.
“I think all things being equal, people would prefer a product to be made here,” Kamler said. “But the decision to do this wasn’t made on charity. After we started taking a hard look at all the factors that could make this work long-term …we strongly felt we could be very competitive.”
In January 2013, Walmart committed to American renewal by announcing it intends to help boost job creation and manufacturing in the United States through buying an additional $250 billion in products that support American jobs over 10 years. The time is right to bring manufacturing back to the United States. Overseas labor costs are rising, while energy costs in the United States remain low. It is good business sense to build things closer to the point of consumption, and America is where the innovation is happening. We are going to meet our commitment in a variety of ways, including buying more from existing domestic suppliers, doing business with new domestic suppliers, and — where it makes economic sense — helping current suppliers move production to the U.S.
We see opportunities across a number of categories, such as simple textiles, bikes, furniture, eyewear, and vacuums. More importantly, [the opportunities reflect] the characteristics of each item — highly automated production, things that do not ship efficiently, or things where the raw materials are available. We have over 1,300 categories we’ve evaluated and have hundreds of active projects ongoing. We’re proud of our progress but certainly there is more work to do.
According to data from our suppliers, items that are made, assembled, sourced, or grown in the United States account for about two-thirds of what we spend to buy products at Walmart. We are thinking creatively about how we buy, so manufacturers can think creatively about where and how they produce their product. In some cases, Walmart is making longer-term product commitments on basic items so suppliers can leverage our scale and have predictability in running their factories.
We are also working with our suppliers to connect the best resources to evaluate opportunities in the United States. Walmart’s suppliers have identified several challenges to [bringing] production to the United States; several issues continue to rise to the top — navigating the decentralized complexities of the site selection, finding raw material and component parts, and workforce needs. We can help navigate those complexities and accelerate the [process of bringing] production [to the U.S.]
On June 28, 2016, we’re hosting our fourth U.S. Manufacturing Summit at Walmart’s global headquarters in Bentonville, Arkansas. The Summit will include another “Open Call” for products made in the United States, a daylong event for companies to pitch U.S. made products to Walmart buyers. We open our doors and make our buyers available to meet with manufacturers to buy products that support American jobs. Our U.S. Manufacturing Summit provides a forum for bringing together industry experts, government officials, suppliers, and innovators. Together, we will explore the infrastructure and economic development opportunities available to new and expanding manufacturing facilities throughout the United States. There are highly competitive states looking [to lure] manufacturing and, with a $250 billion purchase order from Walmart, that is a recipe for success.
The time is right to bring manufacturing back to the United States. Overseas labor costs are rising, while energy costs in the United States remain low. Walmart has also created The Jobs in U.S. Manufacturing Portal (JUMP), a dedicated site for Walmart’s suppliers and those who are interested in manufacturing in the United States. JUMP subscribers can search our knowledge base for documents and videos, as well as submit product proposals and certifications. JUMP also includes a comprehensive and easy-to-navigate collection of resources, including organizations and businesses respected across the country for their contributions to U.S. manufacturing. To learn more about JUMP and Walmart’s 2016 U.S. Manufacturing Summit and Open Call, visit www.walmart-jump.com. If foreign manufacturers haven’t looked at options for production in the United States recently and reevaluated their total cost of production, we encourage them to take a look. The United States is a very competitive place to manufacture for many consumer products and offers many business advantages. A short supply chain, no matter where you are, can help with getting products on the shelves faster, managing inventory, and responding to seasonal and trend demands. It helps to have the world’s largest retailer leading the charge, and we are excited to play a role in accelerating the effort.