A recent Boston Globe article highlighted Tubbs Snowshoes and the companys relocation of its production facilities following K2s acquisition of Tubbs parent company, WinterQuest. K2 also closed the Atlas Snowshoes manufacturing and distribution facility in Colo. in January of 2004. All customer service and G&A personnel are being transferred to K2 Sports facility in Vashon, Wash.
BOSS spoke with Kathy Murphy, Tubbs General Manager, who said that Tubbs will maintain all product development in Stowe Vt. “We want to ensure the Vermont heritage is applied to the go-to-market process,” she said. “Was it nice to sit on top of a manufacturing facility and essentially have J.I.T. inventory? Yes, it was, but the advantages and the synergies we can have by manufacturing in K2s China facility cannot be ignored.”
Murphy pointed to three immediate synergies that the company will realize. First, she said that the team at Worth, a softball bat brand in the K2 portfolio, has a very solid background and expertise in the sourcing and manufacturing of aluminum used for Tubbs snowshoe frames. Second, she pointed to K2 Sports expertise in injection molding snowboard bindings a process which can be carried over to snowshoe bindings. Third she pointed out the new ability to sublimate graphics onto snowshoe decks.
While the advantages for Tubbs in K2s Chinese manufacturing facility are clear, companies like MSR and Crescent Moon Snowshoes have chosen to keep their manufacturing in the U.S. In fact MSR has recently installed a new 400 Ton press which will increase the companys capacity for snowshoe production by three fold. MSR told BOSS in an email that snowshoe sales currently make up roughly 18% of the companys sales and this number continues to grow.
MSR plans to compete against K2s lower cost of production with flexibility. The company stated that their close proximity to production allows them to “easily and cost-effectively refine designs and enhance product development as well as quickly ramp-up to meet unforeseen supply and demand from retail partners.”
Other companies in the Bicycle, Outdoor and SnowSports world have found that the slightly higher costs of a domestic work force can be offset by the advantage of flexibility. With the exception of several climbing companies and most boat manufacturers, very few hardgoods companies still produce domestically.
Thule is one additional exception. Even though the company is headquartered in Sweden, about 80% of what is sold in North America is made in North America, according to Fred Clark, Thule N.A.s CEO. This gives Thule flexibility to fill in-season orders and reduce their spending on speculative inventory. About 20% of the products shipped each day are made that same day.
The most notable examples of leveraging flexibility come from softgoods companies. DeFeet not only keeps their production of socks and baselayer domestic but also purchases their raw materials from domestic sources. A large portion of DeFeets business involves custom work and local sourcing and production allows the company to keep inventories lean and still fill orders quickly. There are many other examples of the advantages of domestic manufacturing, including Thorlos, Fox River, TimBuk2, and even the Australian company, Crumpler.
The recent exodus of manufacturing facilities clearly shows that there are advantages, mainly price advantages, to Asain sourcing and its nearly impossible to ignore those advantages in todays competitive marketplace . However, many companies have analyzed all of their options and determined that domestic manufacturing paired with quick order fulfillment and just in time inventories can offer a different advantage.
