Walmart's 'Made in USA' push exposes strains of manufacturing rebirth

Jun 04 2014, 17:13 IST
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Companies need to start from scratch to make products that meet Walmart's standards. Companies need to start from scratch to make products that meet Walmart's standards.
SummaryCompanies need to start from scratch to make products that meet Walmart's standards.

When Walmart pledged last year to buy an extra $250 billion in U.S.-made goods over the next decade, it appeared to be just what was needed to help move America's putative manufacturing renaissance from rhetoric to reality.

But suppliers trying to re-shore production as part of the initiative by the world's largest retailer are running into practical problems as they try to restart long-idled corners of U.S. manufacturing.

Companies that make the leap have to grapple with a host of challenges, including a shallow pool of component suppliers, an inexperienced workforce, and other shortcomings that developed during the country's long industrial decline.

"A lot of the tribal knowledge and skill sets are gone because the humans who used to do that work have either retired or died," says H. Kim Kelley, the CEO of Hampton Products International, a privately held maker of locks, lighting and other household hardware. The Foothill Ranch, California-based company began selling products made in Asia to Walmart in the 1990s and is now supplying it with some U.S.-made products.

Trying to rebuild that manufacturing capability, while making products that meet Walmart's standards, can require companies to "start from scratch," Kelley says.

Cindi Marsiglio, the Walmart vice president overseeing the U.S. sourcing push, says the retailer and its existing suppliers have 150 active reshoring projects in various stages of development. For all too many, she says, finding U.S.-made component parts has emerged as a vexing problem.

Hampton, which also makes tow straps, tie-downs and bungee cords for the automotive market, had a hard time locating a U.S. maker of lightweight but strong polyester yarn. Marsiglio says other suppliers complain of difficulty finding small motors, as well as plastic injection molding equipment and computerized cut-and-sew tools.

The issue is so widespread that Walmart is making it the focus of a two-day summit it is hosting in August in Denver. At a similar summit held in Orlando last year, Walmart focused on connecting suppliers with economic development officers from states hoping to lure the new factories.

The retailer says it is especially interested in having factory owners with excess capacity attend the August event - even those that aren't interested in supplying Walmart directly. The hope is that they can become contract manufacturers to Walmart suppliers looking to produce in the United States.

On July 8, it is also inviting hundreds of potential vendors to an "open call" to pitch U.S.-made products to the retailer in Bentonville,

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