Recently at Maker’s Row, we’ve seen a heightened interest in bringing manufacturing back to the United States. With the pending political initiatives, American manufacturing is becoming more of a consideration for brands that are currently producing abroad.
We reached out to our community of manufacturers and quickly discovered that even big brands are leading the charge to transition production to the United States. Philip Franzos has a history of helping big retailers transition their private labels to onshore production. His manufacturing company, Accurate Knitting, is based in Brooklyn and has serviced retail giants like Target, KMart, and SEARS. We sat down with him to learn the importance and the logistics behind onshoring.
Phil remembers first being contacted by Target in 2002 for their Made in USA program. The following year Accurate Knitting began production for Target’s private label. Since then, Accurate Knitting has designed and manufactured for Kmart and Sears labeled apparel. Phil shared that he is currently in talks with Target again for planning a promotion on “Made in USA” sweaters. “We see a lot of interest in the big retailers wanting to make commitments in manufacturing here in the US for the 3rd and 4th quarter of 2017.”
So why exactly are big retailers transitioning parts of their production to the United States? Phil shares that despite increased tariffs being the main concern, the main factor is inventory control. It’s true that companies are concerned with how the current administration might change imports and tariffs; however, Phil believes that the changes will make domestic and international production comparable. Hence the benefit of being able to manage your inventory more efficiently at the same price is the biggest motivation to make the transition.
“Instead of having to predict inventory demands a year in advance, companies can plan out 3-4 months in advance. This allows for better control of inventory in the USA. If we get the first contact April 1st then we can have the inventory to them by June.”
Phil did warn us about details and design. If producing in America, more details means more money. More details means more time is taken in producing an individual garment, and since labor costs in the US is significantly higher you will pay for intricately designed pieces.
Whether onshoring is a trend or a precautionary reaction, Accurate Knitting has seen is as a smart business decision in managing inventory. Phil is looking forward to what’s in store for the rest of the year “We see a lot of interest in the big retailers wanting to make commitments in manufacturing here in the US for the 3rd and 4th quarter of 2017.”