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Made in the USA: U.S. suppliers leverage advantages of domestic production

April 30/May 7, 2018: Volume 33, Issue 23

By Mara Bollettieri

Many domestic flooring suppliers cite numerous advantages in producing stateside. A huge benefit that Don Finkell, CEO of American OEM, pointed out is the ability to respond quickly to changing design trends in the industry. “We are closer to the market, so we are more aware of consumer preferences,” he explained. “In addition, consumer trends favor locally made products. American made has become a whole movement of its own.”

Others cite much shorter lead times as being a key benefit. “We have the ability to deliver product for large installations within four weeks,” said Michael Raskin, CEO of Raskin Industries. “In addition, we can fill in our domestic inventory to support distribution and our distributors can bolster their supplies if needed, which provides excellent support and turnaround.”

Matt Rosato, director of portfolio management, Anderson Tuftex, concurred. “When you have domestic production vs. something that’s sourced overseas, we are more agile and able to quickly hit lead times, especially for some project work. If it’s overseas, you’re looking for, after production time, 12-16 weeks of transit time into the U.S., where we can turn it around in a couple of days.”

For executives like Jimmy Tuley, vice president of residential resilient, Mannington Mills, being able to innovate and bring products quickly to market go hand in hand. “We’re also in control of our process. It’s one of the cores of Mannington—to be able to control your own destiny. And when you produce, you control that whole supply chain.”

Tom Lape, president, Mohawk Residential, can attest to that notion. Mohawk Industries is in the middle of a major push toward domestic production, with $700 million invested in five different plants. He noted that 90% of what the company produces is being sold right here at home. Beyond that, he said, “there is a high level of supplier reliability; the more you in-source, the more you create a more reliable customer and there are fewer big surprises.”

Onshoring creates jobs

Opening plants here at home, suppliers say, has increased the number of employees that suppliers need to hire. Paul Stringer, vice president of sales and marketing, Somerset Hardwood Flooring, shared that the number of employees has increased exponentially over the years now that the company has onshored production. “I started work at Somerset in 1999. At that time, we had roughly 225 employees; today, we employ more than 900 people throughout all of the Somerset operations.”

The creation of more jobs, in turn, sparks work in other industries as well, executives say, thereby stimulating the overall American economy. Mannington’s Tuley illustrates how opening plants throughout the U.S. has done precisely that. “If you look at a plant that’s growing and expanding, chances are there’s a restaurant in that area that’s opening, there are roads that are being worked on—all sorts of service industries spring up around manufacturing facilities.”

Anderson Tuftex’s Rosato also believes there’s a direct correlation between plant openings and the creation of jobs in surrounding communities. “We have a large project in Alabama with Shaw that we are investing millions of dollars in, stimulating local jobs in that state as well as other states in which we manufacture—be it California, South Carolina, Tennessee or Alabama. This is definitely impacting and increasing the workflow and job creation in those states.”

Don Maier, president and CEO, Armstrong Flooring, also feels his company is contributing to the increase in jobs in certain states. “Our domestic manufacturing supports local jobs, and we are a significant employer in many of the communities where our U.S. plants are located,” he stated.

Inherent challenges

Despite all the advantages to onshoring, there are some inherent challenges. The most prominent is the void associated with the rise in manufacturing job openings vs. the lack of a skilled workforce to fill those positions. Somerset’s Stringer can attest. “I think this new generation has frowned on factory work or production work,” he told FCNews. “Young people today want to work on computers or sit in front of a screen. They don’t see themselves doing physical labor.”

Vance Bell, chairman and CEO, Shaw Industries, concurs that finding employees in this modern age is difficult. However, he said, the company is trying to encourage people to work in this field. “We believe we have an opportunity to educate students about the rewarding careers available in manufacturing and the diversity of career paths they can take here at Shaw.”

But even in cases where you have skilled employees, there’s still somewhat of a learning curve—especially when opening up a new plant. “It’s extensive and it takes time to train people, to get equipment exactly how you want it,” Mannington’s Tuley said. “It’s a major undertaking to be able to do manufacturing in the U.S.”

Other challenges that suppliers face is the competitive pricing of products from overseas. “The most notable is the battle against cheap imports,” said Frank Douglas, vice president of business development, Crossville.

Some consumers, he noted, are indifferent when it comes to the whole Made in the USA movement, opting instead for less expensive goods.

Potential impact of tariffs

Many flooring industry executives say it’s too soon to tell whether policies instituted by the Trump Administration have helped accelerate domestic production (see related story on page 20). On some level, though, many feel the mere threat of U.S. tariffs on some Chinese imports could indeed enhance domestic production.

According to Gregg Link, senior director of product management, Dal-Tile, those who make products overseas may be at a disadvantage if these tariffs are enacted. But that’s a big if. “For those that don’t have manufacturing capability and have a heavier reliance on sourced goods—and in particular China—that’s obviously going to be something that they’re going to question,” he said. “I don’t think there’s any definite direction.”

American OEM’s Finkell sees the threat of tariffs on some imported goods as beneficial to Made in the USA. “I do believe that uncertainty around what President Trump will do with tariffs is helpful to the domestic industry. Prudent buyers are increasingly hedging their bets so as to not to have all of their eggs in the import basket if a trade war breaks out or significant tariffs are imposed on imported wood floors.”

Mannington’s Tuley is uncertain about the threats as well but feels those who onshore have the upper hand. “It’s so difficult to tell in our current environment what could happen. Certainly, tariffs could change the pricing structure of flooring products if they’re taxed in certain ways. And that could give companies that manufacture in the U.S. an advantage. But it’s so hard to predict what’s going to happen.”

Shaw’s Bell feels that regardless of whether the tariffs happen or not, Made in the USA is the way to go. “We just believe it makes economic sense for any company to have some level of in-market production for their products,” he said. “That is the overall trend globally.”

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Ten people making a difference

May 8/15, 2017: Volume 31, Issue 24

Some adjectives used to describe the leaders who made the cut in this year’s list include “visionary, bold, enthusiastic and innovative.” Then there are those who just seem to have a natural proclivity for developing creative ideas that generate results. In another camp you have those talented leaders who inspire others day in and day out, challenging them to continue raising their game to a higher level.

FCNews’ 10 people making a difference features puts the spotlight on those individuals who consistently bring out the best in others.

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