It’s the price of doing business, right? – Guest Blog by Ray Asante

It’s no longer a secret that I’m making great strides in bringing manufacturing and production back to our shores. A few years ago, my colleagues in the bicycle industry laughed at the notion that it would be possible for me to bring business back to the United States. I recall a few years ago when another colleague of mine told me that I wouldn’t last six months in an oversaturated market within the bicycle industry. If you know anyone that knows me well they’ll tell you that if you tell me it can’t be done, I’ll do everything it takes to prove you wrong. I guess I’m ferocious that way.

My company is iRT Wheels (aka Inertia Racing Technology), makers of carbon fiber racing wheels for both consumer and prosumer disciplines. It’s been over 4 years since I was given those six months and we went from a company that started out from my garage to a modest warehouse in Pasadena, California. Starting with only 2 lines of products, we now have over 10 lines of wheels and everything is hand-built right here in our facilities.

You know, a little over a decade ago, it took millions of dollars to produce your own film. Now, you can shoot your own film using affordable cameras and edit them on your home computer. Control was given to every day people like you and me and turned normal people into professional filmmakers. These days there’s no excuse why you can’t produce your own film from the comfort of your own living room. This opportunity has come to us again and control is being given to you. The only question that remains is what you choose to do with it.

There are a few things that make a company unique. In my industry, it’s innovation and the ability to come up with something new. Once upon a time production was taking place in industrial areas of the US and one day we lose almost 90% of manufacturing to Asia, maybe more. In our case, our innovation is in the design and aesthetics of, for example, our bicycle hubs and the “something new” part is simple…bringing production back to the United States. Think about it – it’s new again.

So about that opportunity I was talking about…

Our engineer and production manager designed a unique wheel hub for us. We’d then take that .stl (Solidworks) file and send it to Taiwan and have a prototype sent back to us at the cost of between $7,000-$8,000 dollars. That doesn’t include programming time, shipping costs or even the price of waiting. That same hub, had we sent it locally or at least a CNC shop anywhere West of the Mississippi, would have cost us closer to $10,000 and up to $16,000 if we hired a bicycle hub company to produce it under the condition that we’d place an MOQ (Minimum Order Quantity) with them. Now keep in mind that these are the associated costs of the initial prototypes. It doesn’t even factor in the costs should there me slight alternations that needed to be made on the design. By the time you’ve fine-tuned the design, we’d have gone well over $20,000 and we haven’t reached production yet.

As they say, it’s the price of doing business, right? Bullshit.

So I’m going over our expenses and I come up with this crazy idea that my partner has zero knowledge of what’s simmering in my head. My partner, Lynn (who is essentially my business wife), well, all expenses go through her. ALL. But this time, I conveniently forget to consult with her and I purchase a pro-grade desktop 3d printer. After all, I have about 2 weeks before she see’s the charge on our company card and luckily, she’s out of our San Francisco office so she has no idea I have it (I’m tricky that way). Anyway, knowing she’s going to have a fit, I get together with my engineer and production manager and I have them print the same exact hub that I had both Taiwan and the local CNC shop created for us weeks before. You’ll never guess what happened next – actually, I think most of you will guess but just in case, you’ll never guess what happened next.

I created the same exact hub.

But that’s not all! I created it in less time with zero shipping costs and the final price for the initial prototype? $38 in ABS thermoplastic and $120 using the Ultem 9085 thermoplastic on a Fortus by Stratsys with materials provided by Matterhackers. That means I can make as many modifications as I want and it will still cost 95% less than getting samples made. It also means that I can afford to rapid prototype to the final product without having to pass the costs to the consumer. I just saved my company close to $10,000 and the grief of meeting someone else’s MOQ and I’ve saved my customers from paying for my R&D. That’s a value-added benefit for everyone.

Rapid prototyping is now done in-house. Our hubs are now manufactured and assembled in the United States. We’re working with US companies to outsource most of our components while deferring 5% to Japan (after all, they do have a history for making quality products) for their exceptional steel bearings and 5% to Denmark for their ceramic bearings leaving our company’s reshoring efforts at 70–75%. The only thing left is the carbon rim, which is still being made in Taiwan, but the latest update is that we are discontinuing the production of one of these lines to be manufactured in Germany in the interim and before the end of 2015, we’ll hopefully be 100% “Not made in Asia”.

What I’m trying to say here is that with the advent of newer technology, there is absolutely no reason why one cannot start the gradual transition of reshoring. It doesn’t have to happen overnight but that’s why they call it an initiative. It will take time. Perhaps not as quickly and aggressive as it has been for me but I’m crazy that way.

The obstacles I’m facing now are finding the right connections to send carbon fabrication to Nevada, Utah or New Mexico. Having it done in California, well, not in my lifetime. As some of your know, California is not that business-friendly and you have to look out for those “Our state will give you $30-million over 20 years if you send production to us.” Note that those types of incentives are at a state level. Once the Federal government gets involved, your incentive at the end of 20 years may only end up being $5 million. Those are some of the things to look out for – those finely printed items. But that’s an entirely different phase in reshoring and definitely a different chapter in my quest to create jobs.

I recently posted on my personal Facebook page something that Theodore Roosevelt said:

“Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows neither victory nor defeat.”

Anyhow, when we finally go into production with the final hub design there’s much reassurance knowing that we didn’t waste time, money and resources and that at the end of the day, we did it here.

I’m going to fire up some John Mellencamp now. Pink Houses.

That’s my two cents for now.