How an American Manufacturer Saved One Customer Time and Money

Ten years ago, ask most people whether manufacturing cost less overseas or at home and they would have said overseas. For mass production, an offshore contract manufacturer looked like the cheaper choice over an American manufacturer. For many companies, though, the lower unit price came with lower quality, and the savings turned into extra cost.

The management team at an LED products company started from the same belief, expecting high-volume assembly to cost less overseas. After years of frustration with the quality and lack of flexibility of their overseas contract manufacturer, they went looking for a manufacturer in the United States.

They found Kodiak Assembly Solutions in Austin, Texas. The relationship was built around the customer’s business goals. Counting hard and soft costs, moving production closer to home saved the company time and money, and that showed on its bottom line.

Shorter Shipping

Shipping was where the LED company lost the most time and money. Shipping from its overseas manufacturer was estimated at 60 to 90 days, and that was its least expensive option. Air freight was on offer, but it added 30% to the cost of the product, which made it impractical.

With Kodiak in Austin, that wait of 60 to 90 days gave way to one-day delivery at ground rates. Kodiak’s delivery record backed it up: over 97% of shipments had gone out on time over the previous five years.

Higher Quality

For a business buying from overseas, waiting months for products that arrive broken, damaged or below standard is time wasted. If those products were already sold, the delay can cost the business that customer. Shipping products back overseas for rework adds more waiting and wears down confidence in every shipment that follows.

With assembly and ground shipping a business day away, any rework the LED company’s products needed could be done at Kodiak’s facility in Austin, without another trip across the ocean.

Easier Communication

Communication with an overseas manufacturer is hard for a U.S. company. Few times work for a conference call on both sides, so someone ends up giving up sleep or time elsewhere to deal with issues. The LED company learned this quickly: its communications with the contract manufacturer ran on a 24-hour delay, and the U.S. side always took the inconvenient call times.

With a manufacturer in the same or a nearby time zone, a call to Kodiak’s Austin facility is quick and simple to set up.

Kodiak worked with the LED team to build quality products, establish on-time delivery and run assembly processes centered on the customer’s goals. After one year, Kodiak had proven competitive with the overseas suppliers, and in some cases less expensive, while meeting the flexible needs of the company’s own demanding customers. The case is one example of the wider advantages of manufacturing in the United States.