Document Type

Honors Capstone Project

Date of Submission

Spring 5-1-2014

Capstone Advisor

Gary LaPoint, Professor of Supply Chain Practice

Honors Reader

Patrick Penfield, Professor of Supply Chain Practice

Capstone Major

Supply Chain Management

Capstone College

Management

Audio/Visual Component

no

Capstone Prize Winner

no

Won Capstone Funding

no

Honors Categories

Professional

Subject Categories

Operations and Supply Chain Management

Abstract

The beauty industry is an understudied industry that can benefit greatly from reshoring. Product developers in this industry source raw materials from Europe when creating a complex product, and from China when creating a mass-market, basic product. Many companies across the United States have begun to reshore all or parts of their manufacturing process. They have been able to benefit by cutting transportation costs and lead time, and by maximizing quality. This thesis aims to explore the reshoring trend and its viability for mass-market products in the beauty industry.

A case study was compiled to discover whether it is economically feasible to reshore the manufacturing process of mass-market beauty products. Costs associated with the production process of a basic two-ounce plastic bottle were researched. After consulting with companies in the industry, all associated costs for manufacturing a two-ounce plastic bottle in China, such as manufacturing cost per unit, transportation costs, and duty rates, were determined. Then, all associated costs for manufacturing that same two-ounce plastic bottle in the United States were compiled, after consulting with Currier Plastics, a custom molding solution company based in New York. These figures were compared after plugging them into a Landed Cost Calculator, which determined a final landed cost per unit. The results proved that a United States manufacturer could offer a lower landed cost by four cents per unit than its Chinese competitor.

It is evident that the beauty industry can benefit from the reshoring shift that many companies are taking advantage of. Companies can benefit by cutting costs through manufacturing techniques, increasing sustainability efforts, and delivering effective Made-in-the-USA marketing to their consumers. Additionally, by reshoring operations, companies will be cutting multiple levels of risk by eliminating the effects of fluctuating exchange rates and the variability of fuel costs, and by maintaining quality and environmental standards at a high level.

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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