Manufacturing your products in the USA; Hasbro steps up with a domestic contract manufacturing service

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Despite the reality that 86% of the world’s toys are made in China, there is an underlying sentiment among some in the U.S. to bring manufacturing home.  Those who want to make their products in the America typically do so out of a sense of patriotism, a desire to create jobs and / or a lack of experience in working in a foreign country.  Whatever their reason, they typically end up frustrated by limited capabilities and higher prices.

Russ 10-5-09 (3) In the past, this has been the concern of a minority of companies.  The desire to find alternatives to China, however, became more mainstream after the product recalls of a few years ago and has taken on increased momentum due to continuing increases in the cost of manufacturing in China. 

It was for that reason that I was intrigued to meet Russ Davies of HasbroHe is heading up that company’s efforts to bring O.E.M. game manufacturing back to the U.S. by opening one of their factories to contract manufacturing. The name of the new venture is 360 Manufacturing Services.  Here is my interview with Russ.

Richard:

Why have you decided to start OEM domestic manufacturing?

Russ:

Our strategic plan over the last 3-5 years consisted of a three pronged approach to improve the site’s competitiveness; 1) transitioning to a more versatile and flexible workforce, 2) capital investment in high speed automated equipment and 3) a robust continuous improvement process.  Our success in these areas increased our throughputs resulting in the creation of available capacity allowing us to enter the OEM arena.

Richard:

Is this part of a larger trend in the industry?

Russ:

It’s my opinion that over the past couple of years, companies have started to explore “near-shoring” or domestic manufacturing over importing from overseas where it makes sense.  There are several opportunities aside from lowest cost that small/mid tier game companies need to consider.  As an example, a company should understand the risk cost of overseas manufacturing versus near-shore or domestic manufacturing; another consideration should be lead times and customer demand responsiveness.  Leveraging domestic manufacturing allows a client to accelerate and decelerate production more quickly either maximizing or minimizing their financial exposure.  By shortening the supply chain via domestic manufacturing a client optimizes their inventory holding position.

Richard:

Exactly what precuts and services will you provide?

Russ:

We offer our clients a single source location for their manufacturing needs; our competencies include printing, paper conversion, die-cutting, paper to board and board to board lamination, card conversion, bagging, game boards, puzzle processing, injection and thermoform molding, final assembly/pack-out and component warehousing.  Our professional services include product specification and development assistance, purchasing services, engineering services, value analysis, pre-press assistance and both internal and independent product safety testing.

Richard:

What are the advantages of manufacturing with you / in the USA?

Russ:

The primary advantages to our manufacturing services are assisting the client in risk management by allowing the ability to more tightly manage their supply chain.  We offer lead-times of 6-8 weeks which allows clients to minimize the financial risks associated with off-shoring lead-times.  Domestic manufacturing also reduces/eliminates potential communication obstacles such as time differences or language barriers and the need for a manufacturing broker.  It also allows the client easier access to seeing where and how their product is being produced to ensure they are getting what they expected.

Richard:

What is the price differential between manufacturing in the USA and China?

Russ:

This is a difficult question to answer because in my opinion a client should never make a decision solely on price; they need to fully evaluate and understand the larger total cost picture that will best meet their needs.  As previously mentioned price is only 1 factor in the decision making process, they need to factor in lead-times and manage that against their risk-aversion level.  Meaning do they have the financial means to assume potential obsolescence should the item not sell as expected or absorb the loss income potential should the item take off and they are not able to support the demand due to long lead-times from off-shore sources.

Richard:

If someone wants to know more.  How can they reach you?

Russ: 

They can email me at Rdavies@360ManufacturingServices.com or call  1-877-630-2417.

Richard:

Thank you Russ.

 

10 thoughts

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  2. This is a very encouraging article. I am in the process of getting my business started and need to find a manufacturer to produce action figures. I want to follow Hasbro’s trends and turn to the United States for manufacturing. If anyone has any lead, I would gladly take them.
    Thank you in advance, Carine

  3. Nice article. Thanks for posting it. I agree that end-user prices are higher when the product is made entirely in the USA. I see that Russ skirted this issue a bit when asked, perhaps because that is a given. The need to find ways to produce products more efficiently to balance out the high cost of labor and materials here in the states is a challenging one. For many of us consumers, price is not the only factor influencing our purchase. I often find myself choosing the USA brand rather than the overseas brand, if the price is not ridiculously higher. In this very small way, I feel my purchase can encourage green manufacturing, reduce environmental harm, and support domestic jobs. If more large companies like Hasbro follow suit, perhaps someday we can once again see a thriving domestic manufacturing industry here in the states. On the other hand, our nation’s demographics can’t be denied. Not everyone can afford to choose the higher quality, higher priced USA-made product. The need to reduce end-user prices for domestic made products remains the pachyderm in the room.

  4. Being from Massachusetts, I very much appreciate Hasbro’s commitment to the State. I am happy to report, our new company Imagination Brands Co., LLC has chosen to produce our flagship product and new Doodle Roll brand in Gardner, MA. I am well aware of 360 manufacturing and hope someday to expand our line of products to enable us to have future products made in East Longmeadow. While our entire product is made and assembled in the USA, it is very frustrating to have to buy our crayons from China. It is also discouraging not to be able to claim our product is US made when every component along with the entire cost of labor is of US origin. I have and continue to try and identify a reliable and affordable US or even N. American option. However, Crayola and Sergeant Art the only two I am aware of are 4-5 times the price, which is prohibitive when producing a low cost craft kit for under $2.50 wholesale. In any case, any thoughts or insight you, Russ or your readers have on this dilemma is always appreciated.

  5. My company Fractiles has been making toys in the USA for 13 years. I am absolutely thrilled to hear that Hasbro is supporting making toys in the USA. I hope Hasbro leads a major migration of toy manufacturing back to the USA. Bravo Hasbro!

  6. My company, Paragon Packaging, has been making board games domestically for 27 years. We don’t manufacture or market our own products, thus we don’t have production scheduling conflicts. We also have tremendous flexibility that won’t exist in a major corporate environment. That said, I applaud the fact that a major US company like Hasbro is finally publicly voicing support of US manufacturing. Perhaps this might be a wake-up call to others looking to US manufacturing, which would be the real benefit.

  7. I agree with bringing things back to the states. But as you notice when asked the pricing question Davies sort of skirted around the subject. It is and always will be the items cost that will be considered the bottom line on any item…

  8. I am so glad to read & absorb this written piece by Richard Gottlieb & Russ Davies. The effort to bring back manufacturing to the US is Huge in my mind! I’ve been starved to read something like this. This country needs to become great again. We can’t do this if we keep going overseas. The talent is here. The talent is waiting to be recognized again. Bringing our manufacturing back is just plain sanity & Yes! not everything of value means bottom line. Bravo! to Russ Davies who just did it! I’m so impressed & I certainly want to hear more about this. If nothing else when it comes to Buzz Phrases: Bring back manufacturing is Totally Green!!! Bravo! Richard Gottlieb for bringing this piece to us who care!

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