2018-09-17 09:49:42

American-Made Beauty

2018-09-17 09:49:42

A “Made in the USA” label has traditionally held a reputation for quality, as well as a promise of employment for domestic workers. The official definition according to the Federal Trade Commission requires that a product advertised as “Made in the USA” be entirely manufactured in the United States. While a number of companies adhere strictly to this practice, others are combining various worldwide services to best meet brands’ needs. Over the past several years, a growing trend has been for global suppliers to open “centers of excellence” in the U.S. to serve the strong North American market.

The timing for manufacturing products in the U.S. seems optimal at present.

According to Brad Thompson, head of operations, Americas, and president Geka USA, “The general U.S. market indicates continuing growth: Manufacturing job growth since 2011 has been stable and more recently increasing.” When it comes specifically to plastics, the outlook is especially promising. Thompson says because the fundamental components of a mascara or lip gloss package are made from plastic, it is important to understand the U.S. plastics industry. “The U.S. injection molding and plastics industry in general has outpaced U.S. manufacturing in job growth and efficiency improvements (according to the Society of the Plastics Industry),” says Thompson. “Furthermore, projections going forward indicate continued growth in the U.S. plastics sector.”

Overall, an efficient supply chain remains the No. 1 reason suppliers are choosing U.S. manufacturing. In addition, the waning cost advantages of overseas production, various time and language differences, and convenience have all been contributors to a more local commitment. But there’s more.

A Focus on Supply Chain

Greg Maze, senior brand and sales manager, Neenah Packaging, Alpharetta, GA, says, “We are seeing brands move to domestic manufacturing as a way to better manage their supply chain. Quality control can also be more challenging for brands that source internationally. Although project specification may happen domestically, for reasons such as timing, product availability, or lack of oversight, that specification can be compromised in overseas production.”

Further, Maze says the brands that Neenah partners with appreciate the ease of setting up international supply chain solutions, with domestic support. “It’s the best of both worlds—the ability to source needed products internationally though one of our authorized distributors, yet guarantee environmental certifications because it was domestically produced.” (Read more about Neenah and environmental certifications later in this article.)

HCP Packaging gets frequent requests for domestic manufacturing from customers interested in speed-to-market, and in smaller MOQs for ranges with a wide selection of color-matching.

Local Control for Flexibility

Richard Engel Jr., president & COO, Decotech Inc., also sees a trend toward companies making the “best of both worlds,” with some brands modifying their supply chains with a move toward a mix of regional services in an effort to speed up production and time-to market.

“Many large brands are changing their supply chains to a local, regional structure to combat long lead times,” says Engel.

“However, we decorate several items that begin in Europe, cross the Atlantic to our facility, and return to Europe for fill and sale. It all depends on whether you have something unique that the client will take the time and effort to plan and execute with a global supply chain.”

Engel says within the last few years, their clients have come to place more of a premium on shorter lead times than they ever did before. “Speed to market is the name of the game and planning has been pushed aside in favor of reacting rapidly to what the market is telling you at the moment,” he says. “We have to be very flexible and react to rapid replenishment orders if an item sells well. Our clients could never chase business so quickly if they had to rely heavily on foreign supply.”

Items that Decotech makes in the U.S. for the USA market “obviously have the advantage of shorter lead times, faster development schedules, and better customer service because you can work with people in person, in their own time zone,” says Engel.

Flexibility and the ability to control inventory are features at ScreenTech/Spraye Tech, where John Schofield, owner, says, “As a decorator what we have seen is a trend by customers to want to control the decoration locally. The container, in our case mostly glass, in most situations is manufactured off shore. Because the value added through decoration can exceed the value of the glass container, the customer likes the ability to be on hand for color development and approvals. This process lends itself even more when there are multiple SKUs involved using the same container. It provides great flexibility to market and the ability to control inventory per SKU.”

A total valuation of cost to market is mandatory in determining where it will be best to manufacture.

Erica Roberts, vice president/general manager of Glue Dots International, Germantown, WI, says, “With a focus on supply chain costs, coupled with a trend of rising rates for overseas manufacturing and shipping, many companies are evaluating their total cost to market and see keeping manufacturing in the U.S. as an advantage.” She adds that speed to market, inventory control and a quality branded product are all becoming more important to brands looking to catch the consumers’ U.S. dollar.

U.S. manufacturers today, and in the future, can leverage a higher skilled workforce, according to Roberts, allowing them to ramp up production when necessary to meet local market demands, and/or quickly shift production to in-demand items. Ultimately, she says, “The advantage for suppliers and brands is the ability to meet the demand for better quality products and services while shortening supply chain costs and lead times.”

Politics Play a Role

Politics also play a role in the rise of domestic manufacturing, according to Alex Piagnarelli, North American sales director, Lindal North America Inc. (In May, Lindal, with headquarters in Germany and manufacturing locations throughout the world, opened a 100,000-sq. ft. facility in Columbus, IN. It includes manufacturing, R&D, offices, and warehousing of aerosol packaging solutions, to meet growing domestic demand. It’s part of a more than $20-million investment committed for the U.S. market last year, which includes production, offices, laboratories and warehousing, all on the same campus.) 

Piagnarelli says, “The current political environment is driving a ‘Buy American’ movement, and recent import tariffs imposed by the U.S. government will impact offshore purchases, making domestic manufactured goods more attractive.”

In addition, says Piagnarelli, the increasing cost of ocean transport (largely driven by increasing fuel costs) makes the comparative cost of U.S.-made products more appealing. “Additionally,” he points out, “in terms of supply chain management, we see an increasing number of delays at ports of entry due to high traffic patterns and severe and unpredictable weather conditions. This is compounded by a U.S. trucker shortage which results in goods sitting at the port of entry waiting for trucks to arrive.

Finally, with increasing pressure to reduce inventory levels at our customer facilities, customers are pushing suppliers for just-in-time supply and shorter lead times. Domestic manufacturing and sourcing inevitably become more attractive.”

Global Trends

With a thriving USA cosmetics market, a number of global companies have opened domestic facilities to serve local customers quickly and efficiently.

“For the past three years, there has been a growing global trend toward a more closely-knit system from suppliers to fillers to customers to consumers to ensure faster time-to-market, made here, made responsibly and with transparency,” explains Stéphane Barlet, sales director, dispensing North-America,