WalMart’s Made in USA Program Encourages Reshoring
AnoldKamler, CEO of Kent International, Inc., has a strategic plan. This year the Parsippany, N.J.-headquartered global supplier of bikes and accessories is assembling 175,000 bikes in the United States. Next year the goal is 300,000, and by 2017, 500,000 assembled.
Kent International opened its first U.S. bike assembly facility in 2014 in Manning, S.C. Prior to that, it assembled all of its products in China. While the company still maintains a manufacturing facility near Shanghai, efforts by Walmart’s “Made in USA” program made Kamler consider moving a plant to the United States.
“The buyer back then called me and asked if I would like to meet governors of some states,” Kamler recalls. “He arranged a meeting with South Carolina Governor Nikki Haley and her staff.”
In January 2013, Walmart introduced its “Made in USA” program to encourage U.S. suppliers to manufacture goods on home soil. In return, Walmart is committed to purchasing an additional $250 billion in American-made goods by 2023.
“According to data from our suppliers, items that are made, assembled, sourced, or grown here already account for about two thirds of what we spend to buy products at Walmart U.S.,” reveals Scott Markley, Walmart spokesperson. “We have over 1,300 categories of products, and we’re evaluating each and every one of them.”
This year Walmart partnered with the Reshoring Initiative to help companies manufacture more consumer products in the U.S. The mission of the Reshoring Initiative is to bring good, well-paying manufacturing jobs back to the United States by assisting companies to more accurately assess their total cost of offshoring, and shift collective thinking from “offshoring is cheaper” to “local reduces the total cost of ownership.”
The mission of the Reshoring Initiative is to bring good, well-paying manufacturing jobs back to the United States by assisting companies to more accurately assess their total cost of offshoring, and shift collective thinking from “offshoring is cheaper” to “local reduces the total cost of ownership.”
Harry Moser, founder and president of the Reshoring Initiative, estimates that Walmart’s increased purchases will add 300,000 U.S. manufacturing jobs. According to Moser, “About 60 percent of companies ignore the 15 to 30 percent of the cost of offshoring, [and these costs] are rising rapidly.”
“When Walmart committed to buy an additional $250 billion over 10 years in products that support American jobs, we knew we could also play an important role as facilitator and accelerator,” says Cindi Marsiglio, vice president of U.S. manufacturing at Walmart. “We created Walmart-Jump.com to help companies find resources on manufacturing in the U.S. The Reshoring Initiative’s support page is a great addition to that resource library.”
The support page links to the Reshoring Initiative’s Resources for Retail Suppliers page. “The site is designed to help retail suppliers decide to reshore and then implement successfully,” comments Moser. “Thirty-five listed manufacturing trade associations, companies, and U.S. Commerce Department offices have provided contacts to help companies reshore or do foreign direct investment.”
Currently, Walmart has active initiatives on certain products in categories including light bulbs, tires, bicycles, home textiles, toys, pets, cookware, and many more. “Some categories and certain products are more ready to be reshored,” remarks Markley. “They share similar characteristics, including accessible raw materials, highly automated production, and high transportation costs, and are impacted by seasons or trends.”
Walmart has already seen some success in its reshoring efforts with companies such as Kent International. “Overseas labor costs are rising while energy costs in the U.S. are low,” says Markley. “It just makes sense to build things closer to the point of consumption.