U.S. Manufacturing: Cheaper and Greener?

Energy & Sustainability Technology
U.S. Manufacturing: Cheaper and Greener?
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Elroy’s Rob Honeycutt.

Lean, or “just-in-time” manufacturing can save companies money. But can it help cool a warming planet? Elroy’s Rob Honeycutt says yes.

In 1989, Rob founded a bike messenger bag company built around two novel concepts: mass customization and  U.S. production. The company, Timbuk2, originally based in his San Francisco apartment, tapped into an urban chic aesthetic and became a must-have functional–and fashionable–accessory.

As a small start up company, Rob sought a way to distinguish Timbuk2 from made-in-China heavies like Jansport and Eastpak and he figured a mass-produced, but customizable product made in the U.S. was the way to do it. Customers could choose the colors for their bags and Rob’s production crew would sew products on demand or sell to retailers. That meant he never held onto inventory nobody wanted or sold out of styles customers did want. He claims “stock-outs” and “overstocks” are the hidden costs that many companies don’t anticipate when they outsource production to China, Vietnam, and elsewhere. Lean manufacturing is a concept he picked up on reading about Taiichi Ohno, an efficiency expert for Toyota who called for the reduction of “transportation waste,” clustering production facilities, and low inventories.

By following Taiichi’s example, Rob said he could compete with Chinese-made brands that had to commit to production runs and style choices as much as two years in advance. The U.S. label added to the bags’ appeal, too.

“When (mass customization) is done right it’s incredible how efficient it is,” he said. “Everything I sent out the door was something a customer wanted…The inventory is digital”

When he sold the company to investors in 2002, the company was doing a respectable $4 million in sales.

Rob went on to start other companies and now he’s in start up mode again. This time he’s entering the world of electronics with a product called Elroy, a hybrid between a Bluetooth device and earbuds. For Rob, a Bluetooth headset looks kind of dorky. But earbuds are forever getting tangled. His solution is to shorten the cords on the earbuds to a device that clips to the users’ lapel. Magnets connect the earbuds to the device when not in use. When a call comes in, removing the earbuds from it answers the call. Customers can personalize the device by choosing a color or design on the faceplate.

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Elroy will allow customers to customize the faceplate of the device.

Rob launched a $150,000 Kickstarter campaign to to get Elroy going. He fell well short of his goal, but says he’s not discouraged and will try again.

Rather than head to China for production, he’s planning to base the final stage of assembly in the Bay Area.  “Final assembly in the U.S.” doesn’t have quite the same cachet as “made in the U.S.A.,” but Rob hopes to move more production to the U.S. in time.

But basing production in the U.S. offers more than a business advantage, he says. There are obvious environmental benefits to lean or “just-in-time” manufacturing. Rob has become a vocal advocate for climate change solutions and making manufacturing leaner by reducing the number of bunker fuel burning (and spilling) cargo ships that lumber between the U.S. and China (a clear case of transportation waster since it adds no value) is part of that solution, he says. In a recent piece he wrote for Think Progress he explains:

Practicing Lean manufacturing over long periods of time translates into ever improving quality of goods. As manufacturing guru, W. Edwards Deming, was always quoted to say, “Quality always costs less.” As counterintuitive as that sounds, it is a fact. The implication is that by eliminating transportation waste and leaning out production, you create far more efficient systems, and produce far higher quality goods for less. In this you can vastly reduce CO2 emissions and create more profitable businesses

While he’s in business to make money, Rob says climate change is “humanity’s biggest issue” and he hopes his approach will spur other manufacturers to follow suit.

“People are going to have to build things without generating CO2. I want to show people that things can be done differently.”

Rob is optimistic because of what he sees as the convergence of the maker movement and manufacturing and the efficiencies of lean manufacturing.

“There’s a wide open territory for people who make or build things to produce it domestically,” he says.

8 thoughts on “U.S. Manufacturing: Cheaper and Greener?

  1. Fritoeata says:

    Another benefit to domestic production, regardless of nation, is that it doesn’t send profits out of the domestic economy.
    Lets just say that the US economic structure sucked and needs a revamp… ;) There’s no “stimulus/ federal grant/program/etc.” involved. The money just never leaves!
    (Obviously, most of the “commodity” level items are imported right now, but we must try where we can)

  2. Rob Honeycutt says:

    Fritoeata… That’s exactly right. In fact, if I can build this into a large business, my goal would be to have small assembly plants in each major sales region. Eliminate as much transportation as possible. And those profits in those regions should stay in those regions. Any banking should be done with local banks. Ideally, retailers selling the product should also be local and regional retailers over large big box stores.

    It all makes lots of business sense. Just have to push forward and make it happen.

    If anyone is interested in keeping up with the Kickstarter relaunch that I’ll be doing, please send me an email at: rob@meetelroy.com. And please reference this article Stett wrote in your email. Thanks!

    1. chuck says:

      I’m curious about your approach. How do you intend to make the ‘profits in those regions… stay in those regions’? Your plan to use local banks sounds like an accounting nightmare. Do you have a plan to deal with this? Focusing on smaller retailers is good but it also means smaller lots of product going to more places. This means more packaging and less control over routing and efficiency.
      Idealism sounds good in kickstarter campaigns but how do we actually implement it in real life? I’m not being snarky- I really want to know.

      1. Rob Honeycutt says:

        I’m a long way from setting up multiple regional operations, so I’d read a strong element of idealism into that aspect.

        But as for small retailers, that’s still in the realm of what I know and have done. Selling to small retailers really wouldn’t involve more packaging. Smaller lots are actually ideal for efficient production. If you read about Taiichi Ohno and Toyota, the ideal lot size is one. That’s exactly what I ran at Timbuk2, something called a “one piece flow system.”

        When you start reading about these systems (and there’s a lot of reading material out there) your preconceptions of large batches being more efficient gets blown out the window. It’s all a bit hard to explain in a comments section but what really got me jazzed about manufacturing was learning this stuff.

        A lot of what I’m aiming to do with this project (Elroy) is to, not just set up the same systems I was using at Timbuk2, but extend those systems to a wider range of the supply chain. So, what I end up doing is properly managing as much as the process as possible.

        Toyota does exactly this same thing, except in a different way. When a new supplier becomes an official “Toyota Authorized Supplier” they literally have to give up control of how they previously produced products. Toyota “sensei’s” come in and completely restructure how the supplier’s factory is set up. But in order to be a supplier for Toyota you have to sign on and say they allow them to do this. New suppliers kick and scream but in the end they always say, “OMG, I’ve been manufacturing for X number of decades but I had no idea what I was missing.”

        Clearly, I’m not Toyota, but there are ways that, as a smaller manufacturer, I can accomplish similar things by bringing up stream processes in house and working with smaller retailers down stream to get highly individualized product into the hands of consumers.

        Ultimately, if you read the Think Progress article that Stett linked to, what happens is I get rid of a huge amount of waste in the process and create far more efficient systems.

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Stett Holbrook is editor of the Bohemian, an alternative weekly in Santa Rosa, California. He is a former senior editor at Maker Media.

He is also the co-creator of Food Forward, a documentary TV series for PBS about the innovators and pioneers changing our food system.

View more articles by Stett Holbrook


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