Molded Dimensions Group was recently featured in BizTimes in their ShopTalk article about how businesses are continuing to navigate uncertainty caused by tariffs.
Shop Talk: How are you continuing to navigate uncertainty caused by tariffs?
More than nine months into the year, not much more is known about how long tariffs will continue to impact the country’s manufacturers. Still, most companies have managed to find short-term solutions to continue handling economic uncertainty.
The past few months have proven that global sourcing is no longer a reliable option for many manufacturers, said Mike Clark, director of commercial operations at Hartland-based Fathom Digital Manufacturing.
Fathom has a network of contract manufacturers in several countries including India, Vietnam, China and Malaysia. The company has seven sites in the U.S.
This means tariffs impact Fathom in two ways as the company purchases raw materials and imports finished goods.
At the beginning of the year, Fathom worked with its overseas contract manufacturers to negotiate better deals. That often involved negotiating bulk orders with companies that would then be willing to lower prices.
“There were some consolidation efforts that were put into place,” said Clark.
Fathom also worked earlier this year to negotiate better rates with certain freight carriers.
Tariffs won’t be a temporary roadblock, rather part of an ongoing cycle that mirrors geopolitical changes across the globe, said Clark. This means manufacturers need to keep expecting rapid policy swings. The best strategy is to continue diversifying where and who you do business with, Clark explained.
“The winners moving forward aren’t necessarily going to be the lowest cost producers, but the people that can adapt quickly and offer what I call the best cost solution,” he said.
For some manufacturers, beginning to move some production work back to the U.S. makes the most financial sense.
At the start of the year, Molded Dimensions Group launched a Reshore Success Program aimed at helping its customers decide whether now is the right time to relocate operations.
Molded Dimensions Group is a manufacturer and supplier of custom rubber and urethane molded parts to original equipment manufacturers. About 20% of the company’s business comes from a network of overseas suppliers.
Since the program’s launch, a small portion of the company’s customers who were seeking more stability and certainty have begun the process of reshoring.
“When they are reshoring, they’re getting a competitive price, but also obviously a much shorter lead time and a much lower overhead cost in terms of compliance,” said Braden Schrock, general manager of Molded Dimension Group’s Port Washington headquarters facility.
One of MDG’s customers, a Missouri original equipment manufacturer that makes off-highway components, had a “higher than average concern” regarding tariffs because of the industries they served, Schrock said.
MDG helped identify the company’s three highest volume parts that could be moved back to America. At the same time, new tooling was made at the Port Washington facility while final components being made overseas were expedited.
“We were able to keep their lines up and get as much product as we could out of our supplier’s country while we made this tooling here domestically,” said Schrock.
MDG is currently running sample parts for their Missouri-based customer. That client will soon be able to switch completely over to domestic production for their three chosen parts.
