Sauder, an Ohio-based manufacturer of home and office furniture, has recently announced that it is returning once-outsourced work to the U.S.
Historically, Sauder manufactured many of its furniture products for years with little or no changes. However, Sauder’s customer base of large national retailers has placed increasing demands on the company concerning its line of RTA furniture products. These customers are making regular requests for changes to the furniture line. This has significantly reduced the life cycle of many products and also increased the introduction of new products.
At the same time, large retail customers have placed increasing demands on Sauder for shorter delivery cycles. These national retailers have moved to reduce their inventory levels and have turned to suppliers like Sauder to provide faster turnaround of orders.
The demands of its customers for shorter delivery cycles and Sauder’s strategy to continue to advance its service capabilities was the driving motivation behind the company’s efforts to reassess its supply chain. "One of our biggest strengths is our flexibility and speed of service to our large retail customers," (says Sauder's VP of Purchasing). "We can’t meet this service when it takes three months to obtain parts from offshore."
So, the decision to outsource effects the customer? Wow ... good to know.
Also, initial orders are - as most are - low, to test the suppliers and evaluate before awarding more work:
"The parts selected are not a huge dollar value. This is a learning process," added (the VP). The team explained that its work on the plastic and metal parts has enabled it to develop an approach for assessing new suppliers located closer to (Suder headquarters_. It will use this approach to examine other parts and materials purchased by the company for its production process.
So, what do you think was important to Sauder in selecting US manufacturers?
Financial stability was also an important factor and companies with lean operations were preferred. The team also wanted to find area suppliers who could help them understand product costs and who were able to identify new alternatives for improving performance and reducing costs.
Finding suppliers that would be able to work with Sauder on new product development was a priority. An engineer on the team advised that Sauder spends a significant amount of time developing new products. He explained that there are important benefits to the new product development process of having suppliers located closer to (Sauder) operations.
Do you see one mention of a particular brand of lathe? Any mention at all of machining centers, carbide inserts, injection molding machines or the fact that a supplier's company should be "founded on trust and honesty, since 1972'?
Then why do you focus your Web site, MFG.com profile or any other Web presence on your equipment lists and other things that Buyers don't care about?
Oh, and one more thing: You think Sauder's done?
The team is working on "insourcing" opportunities in a number of other areas.
Work will not be flooding back into the U.S. this year - it took a awhile to start outsourcing, and it'll take awhile for it to regulate. But if a company like Sauder that makes lower-tech, consumer furniture is repatriating its products then don't you think other products of more formidable design could follow?
Get ready. Build your Web presence. Buyers are reevaluating their outsourcing decisions, and they're looking for you.