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Supply chain issues have upended the global manufacturing market and caused delays in delivering much-needed products to a variety of industries. But what does it mean to bring your manufacturing “home?” There are specific distinctions between "made" in the US versus "assembled" and "designed" in the US - not to mention the costs that are involved. How can you understand if this is right for your business?
In this episode, Brandon Acker, President of Titan Abrasive Systems, breaks down what ‘Made in USA' really means - in terms of the product, costs, and the labor to make it.
What you will learn:
➡️ Complying with the 'Made in the USA' designation
➡️ Challenges of sourcing components and materials from the US
➡️ Labor shortages and skills gaps in the US
Complying With The 'Made In The USA' Designation
Some of you may be familiar with the term 'Made in the USA' but never thought about what that designation actually means or how it compares to labels such as: assembled in the US, designed in the US, or engineered in the US. Brandon has made it clear, and he is proud to say that Titan Abrasive products are authentically 'Made in the USA'.
Here's what makes Titan Abrasive the real deal:
- Designed in the USA
- Manufactured in the USA
- Assembled in the USA
- Sold in the USA
- Sourcing components from the USA
Most recently, the government has passed the Buy America Act which increased the standards that qualify military equipment as Made in the USA. In past years, 50% of the components on a machine or piece of equipment qualified as American-made. This new act enforces standards to slowly increase over time from 50%, 60%, 75%, and higher.
Federal Trade Commission
Although there have been steps towards increasing standards, there are still some weak spots that need to be cracked down on. Unfortunately, other than the occasional military exception, there is no application or screening process required for companies to declare goods as Made in America which can be disappointing for manufacturers such as Titan Abrasive as they pride themselves on being as authentically close to 100% American-made as possible.
There has since been a new Federal Trade Commission rule on the horizon, which pushes online vendors such as Amazon to stiffen up regulations as far as labeling products with their country of origin. Although this may be a step in the right direction, it is still based on the honor system considering there is no check-in process to determine if products are in fact labeled properly. Even though it doesn't seem fair for companies such as Titan Abrasive, understandably it seems almost impossible to crack down on every manufacturer to determine whether or not their claims are accurate.
Made In USA: The Importance of Sourcing Components
Have you ever heard the term, "they just don't make things like they use to?" Titan Abrasive has been manufacturing American-made sandblasting equipment since the 1950s and Brandon has made it clear that sourcing components made in the USA is more difficult nowadays than it was in the past due to globalization. Brandon has carried this pride with him not only as the CEO of Titan Abrasive but also enforces this mentality in his daily life as he does his best to purchase personal goods that are made in the USA. Not only does this mentality support the US workforce but it also gives consumers a sense of nostalgia knowing products made in the USA are good quality.
Challenges Of Sourcing Components And Materials From The US
If your company is like Titan Abrasive and your equipment is made up of an extensive number of components, one of the roadblocks you might share is trouble finding as close to 100% American-made materials as possible. On a personal side, Brandon expressed one of the biggest sticking points he has faced is sourcing LED lights, but luckily for him, he connected with the only manufacturer of LED lights in the country. There are some bumps in the road to be expected but sometimes the risk is worth the reward.
How the pandemic shifted the market
The pandemic made consumers more aware of supply chain issues, and although Brandon has seen a small uptick in business he still believes it is too soon to tell if it will remain steady. Although bringing manufacturing home provides a more reliable route for distributing goods, there are still similar impacts stateside such as unprecedented labor challenges which have caused less significant shipping delays. Fortunately, customers of Titan Abrasive have proven to remain loyal, purchasing their company’s products because they are fully made in the USA.
There are different labor considerations when it comes to the actual manufacturing of products. Step one is to determine the total amount of people needed and break it down into those who assemble the goods and then there are those you look to for sourcing the components. Another consideration is the fact that labor in the United States is more costly than in other countries due to higher wages, insurance requirements, and workers' compensation, all of which are not enforced in countries such as China or Mexico. Although this drives the price of goods up, consumers value a better quality product that arrives quicker than what comes from overseas.
- What are the total costs involved when making products in the US?
- Will that affect how much product you can sell?
- Are you able to source the components needed?
- Is it the best fit for everyone?
- Does it work for you?
- Do you like it?
- Does your customer base like it?
- Do they express concerns about it?
- Are customers willing to pay a little more?
Pride aside, this isn't one-size-fits-all, and it's not going to be a good fit for every company. If it is a situation where you might lose part of your customer base or it could negatively impact your business then it's up to you to decide if it's actually worth it or not.
In a world where people are more focused on cost over quality, they turn to cheaper products even though it's not a lasting investment in the long run. Although this may be true, there are specific manufacturing sectors that share the same value as Titan Abrasive in American-made materials such as Aerospace and Defense.
Labor shortages & skills gaps in the US
It's no secret that businesses everywhere have felt the pressures of labor shortages and skills gaps. In relation to company size, the process of bringing manufacturing home may be less challenging for those smaller companies in comparison to a company that might need upwards of 1,000 or more employees. Sourcing materials has also been an ongoing struggle, so you have to look at the big picture and determine how many things you are trying to do at once, which is another reason it may be more feasible for smaller manufacturers. Despite the scale of your business, Brandon encourages even bigger organizations that the labor shortages will get better over time and should not be discouraged, because there is still talent out there, you just need to find it!