Sourcing US Parts Blog Series – Part 3 – What Is Competitive?
Made in USA Labeling – The Reshoring Institute was asked to assist in researching sources for U.S. made parts for our client. The company wanted to start manufacturing products in the U.S. To label the product “Made in USA” according to the FTC regulations, “all or virtually all” raw materials and component parts must be made in the U.S.
We obtained quotes for the top 21 parts, by value, from their Bill of Material (BOM). Unfortunately, only a few U.S.-made parts were price competitive with parts from Asia. The remaining parts were significantly more expensive than Chinese parts, other parts were difficult to quote due to lack of information, drawings and/or BOM.
The parts that were most competitive and in some cases cheaper than Chinese parts were injection molded plastic parts and metal stamped parts. Assuming you provide the molds and stamps (cheapest option is to buy them from China) U.S. manufacturers can make the same parts less expensively and with higher quality.
The quality of the parts is important in keeping costs low. Our client needed to paint both the metal and plastic parts due to low quality finishing at Chinese suppliers. Painting doubled the cost of the parts. We recommended working with the supplier to ensure the finished part is smooth and clean in order to keep costs low.
For metals, another way to keep costs low is in the design of the part. Keeping the design simple and multi-functional can save on tooling and the number of parts needed. For example, if a housing/casing is needed for a part, keep the sides (left and right or front and back) the same. Another example could be internal shelving that can accommodate different products lines. Standardizing on one stamp for multiple shelves that can go in multiple products, saves on tooling costs and process time.
For injection molded plastic parts, keep the design simple: the fewer, less complicated parts the better. Avoid complicated, fancy plastics unless necessary for safety reasons. Use standard colors for parts the customer won’t see and standardize whenever possible.
Depending on your product and the parts needed to create it, “Made in USA” labeling may not be possible, but there are other labeling options. We can help you determine where to source your parts, how to label your product and so much more. Contact us for more information.
