story by Kim Souza
ksouza@thecitywire.com
Editor’s note:The Supply Side section of The City Wire focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by The City Wire and sponsored by Propak Logistics.
Longtime Wal-Mart Stores supplier Ranir recently made a $3 million investment to expand its manufacturing facility in Grand Rapids, Mich. The expansion will allow the company to make an additional 5 million power toothbrush heads per year in Michigan instead of having the heads made in China.
Ranir said the investment is part of Wal-Mart’s commitment to buy more American-made products over the next decade. The 7,500 square foot expansion in the Grand Rapids will also mean 19 new jobs.
The expansion in Grand Rapids, the headquarter city for Ranir, is a continuation of an existing contract with Wal-Mart, but the facility also will make toothbrush heads for other customers, according to Ranir corporate spokeswoman Amanda Passage.
"The move of manufacturing back to the U.S. has not increased production of power toothbrushes, but it allows more flexibility to grow this segment," Passage said.
Wal-Mart’s U.S. Manufacturing Lead, Michelle Gloeckler, told The City Wire in June that the retailer had more than 150 projects underway with various suppliers. She said reaching out to suppliers that already have some U.S. manufacturing in place is one of the areas where the retailer has been able to make progress. With some additional investment, suppliers like Ranir and NUK infant pacifiers and KORONA Candles have been able to onshore some of their production this year.
Wal-Mart officials announced in 2013 a pledge to buy $250 billion in U.S. made products in 10 years. The Boston Consulting Group predicted that the $250 billion investment would create one million jobs, including jobs in manufacturing and related services.
"Ranir's collaboration" with the discount retailer "builds on our shared priority that moving manufacturing to the U.S. is good for business and the country," Ranir CEO Christine Henisee said in a statement. "Our mission is to help retailers win with their consumers by providing quality products, outstanding customer service, innovation, and exceptional value. Increased U.S.-based design and manufacturing helps us deliver on all of those commitments.”
EARLY RENAISSANCE
Harry Moser, founder of the Reshoring Initiative, noted in an Aug. 24 blog post that early signs of a U.S. manufacturing renaissance are underway. He reported that in 2014, jobs from reshoring and foreign direct investment continued to grow and together more than offset offshoring, adding net about 10,000 manufacturing jobs in the U.S. With that, Moser said reshoring and FDI are still relatively small but contributing to the renaissance.
“Between the health of the industry overall and the balancing of the job flow, the beginnings of a manufacturing renaissance are evident, but many actions are required to maintain the momentum. We need continuous improvement in operations and in sourcing decisions to make domestic production the clear first choice in more cases,” Moser writes.
He said there must be continued corporate investment in lean, automation and skills training to improve U.S. competitiveness. Secondly, he said government action is required to make the U.S. more competitive. He cited skills training, lower nominal corporate tax rate and end of offshore currency manipulation as ways governments can help.
He also said consistent, disciplined use of Total Cost of Ownership (TCO) analysis is required so companies can recognize that domestic manufacturing is in most cases their best choice.
Lastly, Moser said would like to see more reporting on reshoring success stories so corporations realize reshoring is worth reevaluating and investing in, and so prospective skilled workers realize that their best career opportunities might again be in manufacturing.