The Future of Manufacturing: Local Production for Local Markets

October 20, 2015 | American Manufacturing

Under_Armor_Marlin_SteelIn a recent article on The Baltimore Sun, athletic apparel giant Under Armour’s head of innovation, Kevin Haley, discussed the company’s newest initiative: “for Under Armour products to be made closer to the markets where they’re sold.”

The project, code-named Project Glory by Under Armour execs, is designed to tackle the challenge of providing highly-customized products to customers quickly in an efficient and economic manner.

Sound familiar? If you’ve been following the Marlin Steel blog for a few months, it might. Under Armour’s vision for the future of manufacturing has a lot in common with next shoring, a recent trend in manufacturing that was featured in the Marlin Steel blog in a post published July 9, 2015.

What is Next Shoring?

Next shoring is a new trend for manufacturing companies wherein these companies relocate their production capacity to areas near where their goods will be sold.

For example, if your key market for a product would be in France, you would set up your production somewhere in Europe. If your market is in the U.S., you would locate your factory in the U.S.

This practice helps make it easier for manufacturers to ship highly customized goods to customers on short notice as it eliminates the long customs and overseas shipping delays incurred when exporting products.

While this is particularly key in the fashionable wear industry, where fashion trends can rise and fall in the time it takes for a cargo ship to take a load of product and move it across the ocean, it has benefits that any manufacturer could take advantage of.

Overcoming the Difficulties of Offshoring

So, why are manufacturers such as Under Armour taking on a next shoring initiative?

The answer can be found in the Baltimore Sun article referenced earlier. In the article, Ravi Srinivasan, an assistant professor of information systems and operations management at Loyola University Maryland’s Sellinger School of Business and Management, pointed out a major problem with the current practice of offshoring production.

What’s the problem? According to Srinivasan, the problem is that “suddenly what was supposed to take two to three weeks may be stuck at a port several more weeks… that’s challenging … specifically industries like fashion and electronics, because of how fast tastes change.” So, what was already going to be a long time-to-delivery is getting stretched out even further by almost-constant overseas shipping delays.

One of the benefits of next shoring that Srinivasan noted was that “making goods locally makes companies not only more nimble in supplying inventory and reacting more quickly to changing tastes, but better able to respond market by market and to customize merchandise.”

Boosting Local Economies and Job Growth

Drew Greenblatt, Marlin’s CEO, noted some other benefits to the practice of next shoring in the Baltimore Sun article. As noted in the article, “a shift toward local sourcing and materials in Baltimore can only help the city and its manufacturing base, bringing well-paying jobs with benefits.”

How does next shoring production of products for the American market to U.S.-based locations help communities in America? Marlin’s CEO highlighted the benefits by saying “if Under Armour is buying from local manufacturers, in all likelihood, the local manufacturers are going to hire locals, and it’s really going to help the local community.” Next shoring creates new jobs in markets close to where you’re selling your goods, improving the local economy and growing the tax base.

So, next-shoring not only makes your company more efficient at delivering custom products in a timely manner, it helps create new jobs opportunities for the communities where you relocate your production, even in companies other than your own.

The future of manufacturing, where quality and speed of delivery are key to success, is here, and companies like Under Armour are helping to lead the charge.

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