As published in Toledo Business Journal - June 1, 2012
B&B Molded Products, Inc.'s facility in Napoleon
Napoleon manufacturer reshoring jobs
B&B Molded Products, Inc. (B&B), with operations in Henry County, is working with customers to return jobs to the US that were previously outsourced overseas. The company has established a reshoring initiative designed to support product needs of customers while at the same time lowering their costs and improving their profitability. Significant improvements in product quality and operations performance are also being realized, according to the company.
B&B is a custom injection molder of thermoplastic materials. The company was started in 1992 by two entrepreneurs in Napoleon, Ohio. B&B was first housed in a 5,000 square foot facility and has since moved and expanded to a 55,000 square foot plant. The company has approximately 90 employees on three shifts. B&B manufactures hundreds of parts and products for the commercial, plumbing, electrical, dispensing, janitorial, and automotive markets.
According to the company, B&B has obtained significant success in bringing jobs back to the US. To date, the company has returned over 10.2 million production units to the US workforce.
“It started with problem parts,” stated John Hartford, general manager, B&B. “A company had parts tooled up overseas and had issues. It was such a critical component that they decided to bring it back to the US in order to figure out the issue and resolve it. That’s where we got our first few opportunities.”
B&B works with customers to assess their total cost of offshoring or outsourcing parts and components overseas. The company has set up a tool to assist this process. The Total Cost of Ownership (TCO) evaluation is used to prepare an analysis at the start of a project.
“We have a worksheet available to show our clients these processes side by side,” stated Ty Whitacre, director of business development. “We’re able to show them a cost comparison.”
Hartford also added there are many factors people do not consider when the move is discussed.
“We’re trying to get everyone to think of all the costs associated with bringing that component in from overseas,” he explained. “Increased transportation costs because of fuel. How much inventory carried with the transit times. Many different things come into play.”
Another thing many companies fail to take into consideration is the cost of getting the project started, particularly when there are trips involved.
“You can spend $20-$30,000 before you know it,” stated Hartford. “That’s just qualifying for a vendor from overseas. How many people does the company have to send? How long will they be gone? The price of an airline ticket is very expensive, but that comes up for too many customers when they are already in the middle of the deal.”
According to Hartford, the company has had experience with customers who receive a container and there is a quality issue with the product. However, there is already another container in transit, which is a significant cost issue for the customer.
“Usually you have to increase inventory because of transit time,” stated Hartford. “Anything unexpected will drive up costs significantly.”
The process B&B goes through with its customers is in four phases. The first phase is the TCO evaluation where design goals and quality requirements are discussed. The second phase is a cost analysis and timeframe analysis with expected results identified. The third phase deals with technology optimization, as well as other considerations, including the preparation of a quote. In phase four the company deals with product release and product management.
“We really start that process by asking a whole series of questions to find out what the customer has,” explained Hartford. “A lot of times we find the customer doesn’t own the tooling for a lot of the products being made overseas, so we understand each situation is different on what they have and what their goals are. We walk through the different scenarios on the evaluation and address each of the issues.”
Hartford also explained customers have certain expectations when they tool up something overseas.
“They assume they’re going to get it a lot cheaper up front and spend less,” he noted. “They think all they have to do is sell them. We’re finding with customers is that it doesn’t always work out. The tooling always seems to take longer with things like sending samples.”
He stated that a the company may explain they can make a sample in six weeks, but the customer may not see it for eight weeks simply because of transportation time and then arrival. If the customer then does not like the sample, it can go back and forth.
“What was supposed to be 12 weeks on your schedule can turn into an additional three or four months,” he stated.
Another issue Hartford discussed was the timing of getting the finished product to the US.
“The product might be crisis related,” he stated. “If you don’t have the product to support during that time and it’s on a boat somewhere in transit, once it arrives, it’s already too late. A lot of times we find customers that if their products aren’t on their shelves, people are going to get it elsewhere. It’s a speed to the market.”
“Also, if you compare side by side products,” stated Whitacre, “the Asia product is not always cheaper. We try to instill that in our customers and I think it is really starting to catch on.”
There are numerous benefits to reshoring business back to the United States.
“In many cases, people will try to do business within a 200-300 mile radius. That’s drivable in a day,” stated Whitacre. “If there is a sudden increase in demand for a product, you can drive a little while to get to the supplier and work out what it’s going to take to increase production. That’s a sales opportunity.”
He added, “You’ve done that in a day instead of getting on an airplane to Asia or even trying to talk it over on the phone where there is the possibility of communication problems.”
The company would also have the advantage of time with the ability to see the facility on a regular basis. If that company has direct employees overseas which inspect the facility regularly, that is expensive.
“Reshoring minimizes the hidden costs,” stated Hartford. “Of course you can’t always say that there won’t be additional costs if the business is here, but the hidden costs will be reduced significantly.”
Hartford also discussed a recent customer which brought in product from overseas. It was an assembly, but sales on the product were growing and it couldn’t keep up with demand. Also, in the middle of that there was a quality issue.
B&B’s first instance was to solve the quality issue in order to take it and make it function the way it needed to. It continued the discussion on the steady growth items and gave consideration to build new tools, beginning production in the States.
It was an eight month process, but the company constructed new molds and doubled the cavitations, taking lead time down from three months to four weeks for the company.
According to Hartford, B&B has seen continued growth with existing customers and new customers with its reshoring project. It hired an additional 20 people in 2011.
“We even saw growth in the 2008-2009 time period, which was not the case everywhere,” stated Whitacre.
The company also uses opportunities to add capacity to its facilities in order to be in a position to bring in new work.
“We don’t wait to get new work and then put in the equipment,” stated Hartford. “We have been opportunists. We want to get equipment up and running so we can react to customers’ needs for new items.” He added, “If someone came to us today who wants to run in a week, we would have the ability to do so. If not, they would go to a different company.”
B&B serves a diverse range of industries, including sanitation, pumps, food service, and the building industry.
“We do this so if something happened, it wouldn’t hurt us badly,” explained Hartford. “We wanted to shy away from the automotive industry for that reason.”
The company uses primarily injection molding machines. It has 23, which are between 75 and 700 tons. According to B&B, it has two reshoring projects in process at the moment.
“It’s early in the growth curve, but people are starting to notice it more,” stated Hartford.