The Supply Side: Area companies benefit from Wal-Mart’s onshoring agenda

Almost a year ago Wal-Mart held an “open call” for manufacturers to present product ideas. Hugh Jarratt showed up with a plastic taco plate. It’s been a hit. He just sent more plates to 49 Wal-Mart distribution centers, and he’s got two new ideas for the open call set for July 7 in Bentonville.

Jarratt, an entrepreneur and lawyer from Fayetteville, had his taco plate invention produced at PolyTech Plastic Moldings in Prairie Grove. He said the past year has been an exciting ride for his company, Jarrett Industries, and for PolyTech.

“We met with Wal-Mart several times after I got the purchase order the day of Open Call. We shipped a promotional order out to stores last fall and just finally got a place on the retail shelf in April and are shipping to 49 distribution centers for replenishment,” Jarratt told The City Wire.

He said working with Wal-Mart has been easier than he thought, so much so that he will back in front of buyers on July 7 at this year’s Open Call to pitch two more products — tailgate plates with the images of college mascots, and his patent-pending Wader Socks designed to keep feet dry while wearing waders for duck hunting or fly fishing.

“Wal-Mart deserves a lot of credit with this American manufacturing agenda because it not only is giving U.S. manufacturers new opportunities but it has also changed the attitudes to can-do, instead of make it cheaper abroad,” Jarratt said. “It is giving this country’s manufacturing sector an optimistic outlook and there’s a quality element that also instills a source of pride for the country.”

STAYING FOCUSED
Michelle Gloeckler recently told The City Wire that Wal-Mart Stores remains focused on helping return manufacturing jobs to the U.S., with the number of success stories growing and the 2015 manufacturing summit being moved to Bentonville to better connect buyers with products “that are ready to go.”

“It is still alive, well and very strong,” Gloeckler, executive vice president, consumables and health and wellness and U.S. manufacturing lead, said when asked about Wal-Mart’s focus on the manufacturing push.

Gloeckler has said this is a long-term process which is why the retailer expanded the initiative to 10-years and $250 billion in incremental spending toward products made or assembled onshore.

Since 2010, about 300 companies have returned to the U.S., according to the Reshoring Initiative, an industry-supported not-for-profit that focuses on bringing manufacturing jobs back.
Manufacturing jobs are growing to the tune of 646,000 between 2010 and May 2014. While that has not fully made up for the losses in earlier years, it is a step forward of 46% manufacturing output increases between 2008 and 2014, according to the U.S. Department of Commerce.

The Reshoring Initiative said 2014 was the first net gain of U.S. manufacturing jobs in at least 20 years. At least 10,000 jobs were added during the year. Better innovation and research and development, higher productivity, shorter supply chains, and faster response to changing market conditions are some of the reasons touted by the Reshoring Initiative as why reshoring makes sense.

A recent report published by Consumer Reports indicates that 8 in 10 Americans say they would rather buy an American-made product than an imported one. Also, more than 60% said they’re willing to pay 10% more for “American Made” products.

POLYTECH PROFITS
While Arkansas manufacturing has not fared as well as the national trend, Polytech Plastics of Praire Grove said it’s growing sales at a 25% clip year-over-year thanks largely to Wal-Mart’s effort to buy U.S. made products.

“We work with three Arkansas companies that are selling products to Wal-Mart and this has helped fuel us to a record month of sales in March, which we are going to break in June,” said John McCutcheon, co-owner of Polytech Plastics.

McCutcheon said he will attend the U.S. Manufacturing Summit being held in Bentonville on July 7-8, in hopes to attracting more possible jobs.

“Working with Wal-Mart on the taco plate deal has pretty much gone as planned. There has been a little hurry-up and wait, but that’s to be expected given a brand new item and the advanced time calendar retailer’s have to use,” McCutcheon said, adding that Wal-Mart buyers and manufacturing auditors inspected his plant to ensure it passed the requirements.

So far this year he said the plastics injection molding operation has added about 10 full-time workers bringing its employee count to 55.

“We are still hiring if we can find the qualified candidates. We have ordered two new machines with the help of our lenders and we are running 24-hour shifts, six days a week most of the time. This week is a 7-day run because of the demand we’re seeing from our customers,” he said.

This year McCutcheon said PolyTech should do $7.4 million in revenue, up from the $6.1 million it did last year. He credits much of that increase to Jarratt Industires and the taco plate, plastic lids produced for Hanna’s Candles sold to Wal-Mart, and for Smith’s Products of Conway who sells knife sharpeners to Wal-Mart.

McCutcheon said his tool shop inside Polytech also fashioned cutting tools for other local plastics company’s like Bentonville Plastics and Creative Things in Lowell that each sell directly to Wal-Mart.

“We don’t have any of our products to sell to Wal-Mart, but we are happy making products for our customers to sell. That’s our market,” McCutcheon added.

JARRATT INNOVATIONS
Jarratt said Polytech handles all the manufacturing and shipping to Wal-Mart for the taco plates but he hopes to expand with the Tailgate Plate if he can convince Wal-Mart to sell them. He’s working on a 100% sustainable plan for this product. He told The City Wire he has added a full-time “make it happen” (MIH) officer to his lean team.

“The greatest thing I did this year was to hire an ex-kindergarten teacher, Carol Cooper, to organize this business. She is my Make-It-Happen officer. This has afforded me more opportunity to concentrate on product development which is what I most enjoy,” Jarratt said.

Jarratt Industries sells several products in other retail outlets and also runs an online commerce marketplace with Amazon.com, which takes more time than Jarratt has as he already holds down a full-time job as a lawyer. He said the family also added a new baby, which has taken up the time of his other employee, wife Nicole.

In addition to the tailgate plates, Jarratt has high hopes for the wader socks.

“I scoured the country for the right manufacturer and I found them in North Carolina at Mayo Knitting Mill. They have manufactured products sold at Wal-Mart and have been great to work with on this project. My initial run is being delivered this week. I will find out soon enough if Wal-Mart is interested selling them,” Jarratt said.

Link here for more info on the upcoming open call event for manufacturers.