Tide Shifting for American Manufacturing

Robert Mallo President & CEO SFH Company, LLC Chicago, Illinois

Robert Mallo
President & CEO
SFH Company, LLC
Chicago, Illinois

“Made in America” has long stood as a designation for quality products and innovative manufacturing. America’s manufacturing prowess helped win World War II and it made our country a dominant market force for much of the last century.

However, global economic changes, new trade agreements and the rise of low-cost producers in developing countries toward the end of the 20th century began to erode America’s manufacturing dominance. Between 1990 and 2009, the U. S. lost 30 percent of its manufacturing jobs, going from a peak of nearly 18 million to under 12 million according to the Bureau of Labor Statistics.

About one million American manufacturing jobs have been added since then and the quest to add more jobs continues. One of the forces driving manufacturing growth is reshoring. Companies that shifted production to offshore markets over the last 25 years now recognize that the costs, logistics and other factors now outweigh the benefits of offshore production.

One of the original reasons for sending work offshore was that wage rates in many developing countries, such as China, were dramatically lower than U.S. wages. However, as the standard of living improved in these countries, workers demanded higher wages and the cost difference has declined significantly. A Boston Consulting Group study found that Chinese wages are growing about 17 percent per year.

Made In AmericaWith the offshore wage gap narrowing, companies have taken a harder look at the many other factors that go into the total cost of production outside of our country. These factors include longer lead times, freight costs and inventory levels. Companies also have increasing concerns about the quality of offshore products, communication issues, and intellectual property and regulatory compliance risks.

More discussion about these issues can be found at the Chicago-based Reshoring Initiative (www.reshorenow.org). The group offers a wealth of resources including a Total Cost of Ownership calculator to compare offshore/onshore sourcing costs, as well as 300 case histories illustrating why companies have made reshoring decisions.

Of course, Magenta has been a strong proponent of the benefits of American production since the founding of our plastic injection molding company in 1969. Our central location with facilities in Chicago and St. Louis allows us to work effectively with customers around the country. Plus, we operate in areas with a long history and ample supply of skilled manufacturing personnel. In a study from Industry Week, fully 70 percent of manufacturers cited better skilled talent as a reason for choosing production in the United States.

Our skilled workers use an effective Quality Management System that meets the requirements of ISO 9001:2008 and Good Manufacturing Practices – GMP to produce custom-designed and stock products. Each type of product illustrates some of the advantages of American production.

When we begin collaboration on a custom-designed item engineers do not have to travel halfway around the world to meet in person with manufacturers or deal with language barriers that may impede quickly getting the solution you need. Plus, you can be assured that your design and intellectual property are safe with us. Another benefit is our familiarity with regulatory compliance for the food and beverage industry, where we do a great deal of work.

Our investments in the latest plastic molding technology also give us an advantage over offshore producers, who often concentrate on simple commodity production. For example, we can incorporate two-shot injection molding for complex products and have a clean room in each of our facilities to create packaging for regulated industries. Even relatively standard products, such as drinkware, incorporate advanced technology including dry offset printing and In Mold Labeling (IML) Technology.

As an American company, Magenta is a firm believer in making corporate citizenship an integral and intrinsic part of our business activities. We are a certified WBENC – Women’s Business Enterprise and we develop meaningful partnerships with numerous companies and non-profit organizations.

For instance, Magenta recently concluded an agreement to support the National Booster Club Training Council’s core mission. We will provide training and support to booster clubs throughout the United States, showing them how our extensive drinkware line can be customized for virtually any event, including the fundraising and team-building efforts of numerous local school booster clubs.

Strong partnerships, innovative solutions, quality products and economic growth are among the many reasons we encourage buyers to source products that are “Made in America.”

SFH LLC is the parent company for two operating affiliates: Chicago-based Magenta, LLC, Downers Grove, IL and St. Louis-based Permian Plastics, LLC.

Established in 1969, Magenta LLC is a plastic injection molding company specializing in custom designed and manufactured molded closures, containers, components and drinkware. We are extremely customer centric as we strive to exceed your every expectation. From our plants in Chicago and St. Louis, we can serve you with custom and stock plastic injection mold products as well a complete line of plastic drinkware. Our goal is to provide you with innovative packaging that helps to distinguish you from the competition and grow your business. We are responsible stewards of our resources, both in the community and our organization with our Five Keys Recognition Program.