How Bath & Body works brought manufacturing back to the USA

How Bath & Body works brought manufacturing back to the USA
Bath & Body Works found a way to reduce an international manufacturing process that spanned multiple continents and took three months to just 21 days, all done domestically in the state of Ohio.
There was a time when it took Bath & Body Works three months to assemble an $8 foaming hand soap. The pieces had to travel 13,000 miles from China, Canada, and Virginia to Ohio. Today, all of the production and assembly happens on a “beauty park” near Columbus, Ohio. There are several factories all on the same campus.
1) A bottle factory
2) A foaming pump and mechanism factory
3) Label factory
4) Bottle filling factory
5) Packaging factory
The campus contains ten manufacturers and 5,000 employees.
There is a renewed focus on bring manufacturing back home to the United States for reasons that include Covid19, severe weather, trade wars, geopolitical tensions, and supply chain disruptions.
There is a factory building boom occurring throughout much of the country. Spending is at its highest level in nearly 20 years.
Bath & Body Works strategy of consolidating manufacturing and production domestically in a concentrated area proved potent during the pandemic. The issue with this strategy is how vast the supply chain is for even relatively simple products. Moving factories and people is very costly. I would propose that concentrating production should be at the forefront of planning from the initial stages of bringing new factories online. I also believe that black swan events like severe weather, disease, and economic disasters, are hard, if not impossible to quantify. Cost benefit analysis fails to account for outlier events that can dramatically change the whole equation. I understand how expensive it is to do business in the United States when you factor in environmental and labor regulations. When I was in university, the focus was on just in time production. That model totally fell apart when the pandemic hit. Factories were closed abroad and ships sat off the coast of ports waiting to be unloaded. The companies that had stockpiled inputs like semiconductors were able to continue doing business while other production lines grinded to a halt.
Consolidating manufacturers and suppliers is something that has been occurring for decades. My first job out of college was for a Japanese tool maker. There were several other related Japanese companies all located in close proximity to where we were. In the case of Bath and Body works, they convinced key suppliers to move. They faced a lot of resistance.
Some supply chains are so vast and complex that you can not concentrate and consolidate production into a tight geographical region like Ohio. I’m thinking of smartphones and consumer appliances like microwaves and fridges.
The strategy of consolidating manufacturing is best suited for economies of scale and simpler products like soap.
Works Cited:
https://www.wsj.com/articles/bath-body-works-us-manufacturing-413cf9d0?mod=hp_lead_pos7
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