The decision to outsource has unfortunately had a polarizing effect on many manufacturers. There is pressure on companies to keep jobs here in the United States, but the reality is that some companies must outsource overseas in order to remain competitive. After all, what good is an American company to the economy if it’s out of business? The fact is that outsourcing is not an either/or proposition. And for an example of a progressive, highly strategic approach to outsourcing and insourcing, consider the unique manufacturing process of GM Nameplate.
Celebrating its 50th anniversary last year, GM Nameplate, headquartered in Seattle, Washington, is a multi-national manufacturer of custom product identification components, electronic input devices, injection and compression molding and high visual impact, large format digitally printed graphics. The company’s success and heritage rests on its ability to provide custom product identification components for its remarkably diverse client base through its extensive range of capabilities. Not a lot of companies can claim the following as customers: Boeing, Boston Scientific, Cisco Systems, Dell, DuPont, Eastman Kodak, General Electric, General Motors, Hewlett-Packard, Hitachi, IBM, Iomega, Johnson Controls, Litton Industries, Lockheed, MCI Telecommunications, Microsoft, Motorola, NCR, Raytheon, Sony, Tektronix, Texas Instruments, Unisys, Westinghouse, Whirlpool, and Xerox.
In order to provide solutions for so many global brands, (including many American business icons) GM Nameplate has always had to be flexible. Perhaps that’s why the company seems to have a very realistic answer to the question of outsourcing or, as they refer to it, multishoring. As Vice President of Sales and Marketing Gerry Gallagher succinctly put it: “They need us here and they need us there.”
What Gallagher means is that a manufacturer needs to be able to make products both domestically and abroad, that the decision to locate manufacturing facilities offshore depends on a variety of factors and that a smart company prepares itself for any eventuality.
“We have adopted a two-tiered approach, which fits well with our capabilities,” said Gallagher. “We very much want to stay in the United States, and in many cases it actually makes business sense to manufacture products here. On the other hand, offshoring production is the right way to go for many projects because it matches the outsourcing decision made by our customers, and in the long run it pays to follow your clients.”
Staying in the states
A privately held, employee-owned corporation established in 1954 by Lester Green and Beale McCulloch, GM Nameplate has corporate offices and a 140,000-square-foot manufacturing facility in Seattle. The company also has a 27,000-square-foot plant in San Jose, California, a 40,000-square-foot plant in Oregon and an 85,000-square-foot plant in North Carolina.
Said Gallagher, there are several key industries served by GM Nameplate that are best supported by U.S.-based manufacturing. For example, America leads the world in the production of medical devices, which is a heavily regulated industry. Foreign suppliers have difficulty holding up to the high quality and reliability standards of the medical device industry. Therefore, maintaining operations within the U.S. better facilitates quality compliance. So GM Nameplate keeps design and the majority of production for its medical device clients here in America.
Another good example of an industry better served by homegrown manufacturing is aerospace. Gallagher explained that airline manufacturing is a high-mix low volume scenario where any one client may have hundreds of part numbers on file but they order a small volume at any given time, so it simply does not make sense to ship products from Asia to America.
Transporting heavy freight across oceans and continents also precludes offshoring. “Cars are big and bulky, which is one of the reasons why Mercedes, BMW, Toyota and Honda now build cars here,” said Gallagher. “It’s just too costly to put cars on ships and sail them around the world, so GM Nameplate’s clients in the automobile industry are supported by our facilities here in the United States.”
Gallagher also explained that industries like cosmetics, which are concerned with piracy, would prefer to keep all aspects of manufacturing within U.S. borders. So there again, GM Nameplate meets the clients’ expectations to help prevent the proliferation of name brand “knock-off” products, which undermine sales in such industries.
“Our strategy is to have a relationship with our customers that ensures the integrity of our service and gives them the solution they need,” said Gallagher. “So for companies within industries that remain entirely in the U.S., we do what we have to do to take care of them. We are fully committed to maintaining production facilities in the United States, but some of our customers began going in different directions about five years ago, which prompted us to make an adjustment as well.”
One major industry that warrants offshore manufacturing by U.S. companies is consumer electronics. Said Gallagher, it’s usually a matter of volume that dictates the offshoring decision, and to support companies like Dell, Hewlett-Packard and Motorola, setting up a facility overseas at the point of production is a wise move.
“No one is making cell phones and computer peripherals such as scanners or printers in the U.S.,” said Gallagher. “A lot of that production takes place in Singapore and China and GM Nameplate has several facilities to accommodate those scenarios.”
The company owns a 45,000-square-foot plant in Singapore, which tends to handle highly technical products since, according to Gallagher, the quality of labor is more sophisticated, at present, than in China. GM Nameplate currently operates from two China-based facilities. However, despite the necessity to offshore in order to remain competitive, Gallagher stressed that design and prototyping for virtually all GM Nameplate customers typically takes place domestically.
“Although some US companies don’t manufacture here any more, the creative side is still very much based in the States,” said Gallagher. “For example, the design responsibility for HP printers is still based here in the U.S., but manufacturing takes place in a low cost region. They are not designing in China; they have production there. GM Nameplate literally locates itself with such customers by coordinating our teams that support design here with teams providing an Asia-based solution that affords them Asia-based pricing.”
“For Dell we have a similar solution. They need us here and they need us there. That’s an advantage for us because many of our competitors can only design here. It simply works better our way to have people here dealing with design and our people in Asia dealing with production.”
As a company that has a history of finding applications for its technologies and services, GM Nameplate continually finds new markets to penetrate. Or in some cases, markets seem to find GM Nameplate.
According to Melissa Sherrard, GM Nameplate Marketing Manager, the automotive, aerospace and medical device industries remain strong markets. In addition, GM Nameplate is getting into some interesting niche markets such as high-end, U.S.-based wine and gourmet specialties. The company uses its digital, flexo and offset printing capabilities to create labels for products ranging from olive oil to pasta sauce, which Sherrard predicts will be a solid niche for GM nameplate in the future.
“Many of our product identification services enhance product differentiation, and as everyone knows, this is a core element of a branding campaign,” said Sherrard. “Our part in that process is very important and that has driven growth in U.S. niche industries. We also do a lot of product identification and corporate identity projects for our existing clients who are very concerned about how to keep their brand fresh. GM Nameplate provides ideas to help them understand what is possible.”
Sherrard pointed out that today’s customers also expect faster turnaround times and GM Nameplate stays ahead of the curve technologically to meet that demand. Digital printing has revolutionized the industry and at GM Nameplate, which has a history of devising novel solutions, it is one tool they use to ensure smaller runs and quicker responses for customers are easily managed.
“We are continually adapting our company to meet the new demands of our markets,” said Sherrard. “Businesses now have less time and fewer resources to accomplish their goals.
We help them pick up some of that slack, providing substantially more assistance during the up-front design process, including prototyping.” Anticipating this market change, GM Nameplate now provides Instant Intaq, its quick turn membrane switch prototype service. “Our customers need us to be a design solution, to provide critical assistance on the front end, and we are there for them.”
Whether it’s transcending international boundaries with its innovative manufacturing processes, developing customized product identification methods for niche companies or anticipating and adapting to market changes, GM Nameplate understands that paying attention to client needs keeps it competitive in the global market.