What is in this article?:
- Manufacturers Take a Global Approach to Reshoring Decisions
- Changing Economic Factors Prompt Jarden Move
- Getting Reshoring Past Par
Changing Economic Factors Prompt Jarden Move
Jarden Corp. produces more than 100 consumer product brands around the world. Its products range from Mr. Coffee coffeemakers to K2 skis to Bicycle playing cards. It even produces the blank die for the U.S. penny. The company has approximately 60 plants in 30 countries, including 20 plants in the U.S.
Jarden has grown rapidly through acquisitions from a $400 million firm 12 years ago to a $7 billion public company today, Patricia Gaglione told the Best Plants audience.
As the company has acquired firms, an important task has been assessing the manufacturing assets so that it can determine how best to integrate them into Jarden’s network, establish Jarden cultural and operating norms and make the best use of the additional capacity.
Some of the companies Jarden has acquired had established factories in China. Those companies had moved their manufacturing there to take advantage of low-cost labor. While those decision may have made sense 15 years ago, Gaglione noted, the plants were not efficient and well-run.
Three years ago, one of the local villages in China with Jarden’s two biggest factories told the company they needed to move their facilities. Southern China was developing its economy and officials said they wanted to reduce the presence of such manufacturing operations. Jarden executives were faced with deciding where to move and how to do it in a way that did not interrupt manufacturing for its customers, retailers such as Wal-Mart and Target.
“Getting set up to operate in China and protect intellectual property” in China is hard, Gaglione said, but finding a way to exit gracefully can be even harder.
The reasons for moving to China had changed since those plants were built, Gaglione noted. Materials costs were on par globally and differences in labor costs were narrowing. More important factors to consider now, she said, were time to market, innovation and shortening the supply chain.
Jarden found that it had capacity in its network of plants and was able to move four major product lines to facilities in the U.S. and Mexico. Utilizing lean manufacturing techniques, the company has been able to increase its capacity utilization rates in those facilities and take advantage of existing infrastructure.
Gaglione told the Best Plants audience the moves have not been without challenges. For instance, the company had more difficulty than anticipated finding workers with the right skills to handle two of the lines that were brought back to Minnesota facilities.