I got this email from one of our loyal visitors who we’ll call Sam. I’ve reprinted it here along with my response.
Anytime I support offshore production on your forum I get my head shot off. Contractors in Mexico, Central America and the Caribbean Basin are very welcoming to small manufacturers because their large contracts went to Asia. Your DE following is missing a very important trend. The number of resources in these countries today are like it was in the US 15 years ago.
Like you I was a very vocal supporter of production in the US. But with the elimination of the MFA I knew I had to restructure to stay in business. It’s been three painful years and I feel we just have turned the corner with our offshore transition. If I was a start-up today, I’d rather have three painful years and end up with an offshore relationship, than go through three painful years and end up with a domestic relationship only to go through three more difficult years to do an offshore transition.
I think contracting in Mexico, Central America and the Caribbean Basin pushes you (Kathleen) outside of your comfort zone. Our pattern and marker making is still done at our offices and we email a win plot file directly to the factory and the marker is plotted there. It’s even faster than when we would plot the markers here and UPS them to a contractor in the US. If I need my feet on the ground I can get a flight out of the east coast and be there in five hours. Cost of one week stay and airfare is less than $1000 compared to the savings for every container that comes in – $60,000.
Before I start, a bit about Sam as it has bearing on my comments. Sam -as an engineer in an unrelated field- is better acquainted than most about the process and constraints of manufacturing. He’s internalized concepts of production intuitively that others must learn by rote. As such, his tool kit is much more sophisticated than the average designer. While it may be untrue, a part of me suspects that he (perhaps) minimizes the benefits of having gone through the rigors of learning product development domestically. Similarly, the economies of scale afforded by the sales base he started before he moved offshore, is what created the potential of starting his own factory abroad. While I do not doubt that if he knew then, all that he knows now and would have started overseas at the outset, this isn’t tangible for most of the entrepreneurs I know. Our frames of reference diverge. Most of his associates are like him, his viewpoints are reinforced by them. Being no less guilty, I have my own echo chamber. Few of those with whom I associate have the skill sets he does. There are four basic reasons I rarely discuss offshore production. These are:
- I don’t know much about it.
- It conflicts with my mission
- I don’t feel it’s in my readers primary interest.
- Trends are changing.
I don’t know much about it
It is difficult to get up here and pontificate day after day. Difficult for reasons beyond the obvious. As one becomes an authority, one’s boundaries are stretched. One must learn and progress along with readers. However, a greater difficulty is the temptation of transcending one’s competence. It is flattering to have readers ask questions, supposing one knows the answers to questions one does not. Many “authorities” step nimbly into the abyss, numbly blathering on topics of which they know little. I can’t do this, no matter how flattering other’s impressions of my competence. While I do have some experience in working with enterprises abroad -mostly in the Americas- it’s not my area of strength. I prefer to refer people to others who know what they’re doing. If I cannot imagine myself having to navigate the vagaries of offshore production, I am even less qualified to explain it to others. I think it’s more commendable when one refrains from speaking of which one knows little rather than faking it to be everyone’s solution and expert.
It conflicts with my mission
I think that through time (pontificating day after day) the purpose of my core values and mission have become diluted. My mission is not the effect of manufacturing but the potentiality of it by teaching the core concepts of apparel manufacturing to entrepreneurs. It is a much broader concept than regional applications. Regardless of where one decides to manufacture be it the Carribean Basin, China or the US and Canada, one needs to know the core concepts.
Additionally, although I could never be described as a jingoist US citizen, there is a partisanship in what I do; I’ve never denied it. Through transmission of my values (truly Sam, as you say, characterized by my omissions), I am free to disseminate my bias just as others are free to ignore it. I am a capitalist, not a democracy -why do people confuse the two? I’ve never denied having a social agenda. I’ve been an activist for many many years, I’m a political animal. Thirteen years ago, I decided to consolidate my efforts. Others were more effective at advocating social change, fighting for clean water, better health care and better housing. I decided I could have the greatest effect on my community by local economic development in my milieu through job creation. Not everybody can go to college and few can support their families -and their neighbor’s families- at McDonalds or clerking at Wal-Mart. Sure, I could have started my own factory and employed people but I realized I’d have much greater effect if I taught a whole bunch of people about how to start a factory. So that’s what I do. At this point, I’m curious. How many jobs have I created?
Even most of my designers are misguided. They think this is about them. It’s not. It’s for the people I rarely meet and never talk to, those that I will enable DEs to hire. This is about restoring dignity, integrity and self-respect to unemployed people with few options. I too was a welfare mother. Somebody gave me a chance. With that, I paid taxpayers back for those AFDC checks and food stamps long ago but I’m still paying my mentor back. I can’t change the world but I choose to effect change in my small corner of it.
I don’t feel it’s in my readers primary interest
Again, owing to the echo chamber of the association of my readers, I judge their needs to be one of learning the basic concepts of manufacturing and production. It doesn’t matter where they produce. Whether they produce in China or Mexico (the latter is definitely a better bet in my opinion), they still need to weather the rigors of learning product development. While it’s definitely more costly to do that at arms length, I think it’s easier and faster. You pay a premium for time. Once they’ve developed the acumen, perhaps then they can move abroad.
For the record, I don’t think that all people who offshore are bad people, not at all. The offshore operations I have worked with were run by profoundly caring individuals with strongly developed morals and humanitarian goals. They enriched the lives of their employees; they were humbling. I know one DE who fed her employees (and their kids at the on site day care) breakfast, lunch and dinner. A former nurse, she ran a clinic at her factory. Being a nurse from America -she ruefully admitted- was a problem at times. Her pregnant stitchers would come to work, even in labor. At that time, she delivered five babies (in three years) in her own bed.
Sitting in my echo chamber as I do, of course it’s more likely I’d hear of experiences that validate my biases -which is why you’re useful to me Sam! Last week when I interviewed Amelia, I asked her why, if she’d been manufacturing in China, she’d go through the hassle of bringing it all back. What she said was telling. She said that doing it in China made it “too easy”. There were other reasons too, such as being able to exact a higher level of quality control and being able to visit facilities easier. Minimums were a problem, she didn’t have the sales base to make it cost effective yet. She said she had a manufacturing liaison and that made it really easy but that “it was a cop out, we weren’t learning the process of patterns, the cutting, the nuts and bolts of what makes a business work”. Amelia, like many others, are fascinated by it and seek another level in the involvement of their own process. Many manufacturers are returning to domestic production.
Trends are changing
Books are written on this so I’ll just try to hit the high points.
- Provenance: Consumers are increasingly less willing to pony up for the high price of premium goods made overseas if they have a similar option of equally priced goods from a domestic producer.
- Lean manufacturing: Advances in industrial engineering have reduced the costs and time lines of domestic manufacturing.
- No China policies: There’s an increasing number of retailers and sales reps who don’t want to take on pioneer lines who do it offshore.
- Sustainability: With the increasing cost of fuel, manufacturing overseas isn’t as low cost as it once was.
- Fast response: Retailers want to order closer to season; demand for immediates will escalate, not decrease. As I continually say to domestic producers, your only advantage is four weeks on the water, make it work.
- Saturation: Consumers are sick of commodities. They’re looking for limited and unique niche products that reflect their values and lifestyles.
In sum, I don’t think people who offshore are bad. We have different motivations and goals -to say nothing of skills and experience. If people want to do that, they need to hire someone who is capable. I’m not. I am not equipped to advise people on resolving offshore disputes, infrastructure, quality control problems, long lead times, high minimums, locating facilities, weathering communication difficulties, consulting on import procedures or getting goods released from customs. Instilling self reliance and imparting the core concepts of manufacturing is all I can manage. Thankfully, that’ll work anywhere.
And for what it’s worth, if you’re going to produce outside of the US or Canada, I agree with Sam that the Americas are your best bet. Mexico et al have been hammered by outsourcing to Asia -and it’s close, over land. Heck, I’m available if you need a fluent Spanish speaker to troubleshoot existing production related problems -but I can’t help you set up there.