Honors Capstone Project
Date of Submission
Gary LaPoint, Professor of Supply Chain Practice
Patrick Penfield, Professor of Supply Chain Practice
Supply Chain Management
Capstone Prize Winner
Won Capstone Funding
Operations and Supply Chain Management
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.
Gibli, Julie Sarah, "Let’s Bring it Home: Discovering Efficiency in Re-shoring Production in the Beauty Industry" (2014). Honors Capstone Projects - All. 778.
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