In my recent interview with Arnold Kamler the Chairman and CEO of Kent Bikes, I found an example of true inspiration for American Manufacturing. I learned that “Made in the USA” is the way of the future when it comes to manufacturing and it doesn’t have to mean increased prices or reduced ROI. Kent Bikes is a great example of a company that employs robotics and automation in its American plant and creates jobs at the same time. Kent Bike’s South Carolina plant employs over 100 people and is continually growing.
According to Kamler, “Many believe that automation and technology are replacing coveted manufacturing jobs in North America, but on the contrary, if it weren’t for automation and technology, these North American jobs would be located elsewhere”. [bctt tweet=”if it weren’t for automation and technology, over 100 jobs would be located elsewhere” username=”ronjmorris”]The reason behind this is simple. Typically, it is cheaper to source labor in countries overseas such as Asia, but by using innovative technology and automation in factories, they can keep the jobs in North America, while having little effect on the company’s ROI.
Having been in the bicycle industry since 1972, Kamler again revived this lagging industry after it had essentially died in North America in the 1990s. In 2008, 100% of his manufacturing operations were in China where he found it to be the most economical. Four years later in 2012, Walmart made a pledge to contribute $250 billion towards Made in the USA initiatives, transferring those dollars away from imported products. [bctt tweet=”Four years later in 2012, Walmart made a pledge to contribute $250 billion towards Made in the USA initiatives, transferring those dollars away from imported products. ” username=”ronjmorris”]This got Kamler thinking about the possibility of moving his operations to North America, but his search for an affordable and well-equipped manufacturing facility didn’t pan out. That was until the Governor of South Carolina got involved. Governor Nikki Haley who had already dramatically decreased the unemployment rate in South Carolina, gave Kamler incentives to move his operations to her state. This incentive, combined with Walmart’s initiative, got the wheels turning and Arnold Kamler made the substantial commitment to move their operations back onto American soil.
But it wasn’t easy. Kamler faced several challenges in setting up Kent Bikes in America, the largest of that being the inability to find a skilled labor force that was familiar with bicycles. After much interviewing, they hired their first recruits. Those who stood out on the assembly line eventually became managers and their policy of promoting from within has worked well for them. After extensive renovations to the facility to allow it to work for the manufacturing operation, his current challenge is on the supply chain. Because there are no bicycle part manufacturers in North America, most of Kent Bikes’ parts must still be imported, which can be costly and inefficient.
Overall, Kamler says that his overall ROI hasn’t changed much having moved a substantial amount of his manufacturing here and that as they grow, and they are, he will realize a much better return on investment as compared to his operations in China. Currently producing 1,200 to 1,500 bikes a day, their plan is to create 400,000 bicycles in 2017. At that number, the costs to produce the bicycles are higher than China, but he believes that once he gets to the 500,000 mark, he’ll be on par.
At Executive Outlook, we’re always on the lookout for examples of smarter solutions such as robotics, artificial intelligence, and Big Data that are being leveraged today to create a better world of tomorrow. We hope these stories will inform, enlighten, and maybe even inspire you with ideas that will help your business. If you have a story you would like to share, please message me at [email protected]