We Brought Fleet Management Hardware Manufacturing Back To The USA!

/ / cfo, finance, fleet management, obd2

A couple years ago our company had a big decision to make.  We had a good and reliable supplier in China who made our OBD2 fleet management hardware used in enterprise fleet management software but managing this supplier was getting pretty complex.  Every time we made an adjustment it required lots of communication and because of the time differences between the US east coast and China these communications dragged out far longer than they should have.   Mistakes were easy to make and signals got crossed more than once resulting in frustrating delays and expensive errors.Fleet Management System and maintenance software

We found it difficult to manage production from so far away.  Getting new manufacturing samples seemed to take ages and turning things around added more than a week to our schedules.  We had heard rumors of other manufacturers bring production back to North America and so we made the decision to move manufacturing back to the states.

We successfully found a couple of factories that could support our requirements and they didn’t cost any more than our China factory.  So factoring in the costs of shipping, travel and midnight conference calls we actually are ahead of the cost curve with our US partners.   We were especially fortunate because we were able to locate one manufacturing partner within a 2 hour drive of our offices.

Better control over product quality

The quality of our product improved with the shift to US manufacturing.  Today, it is much easier for us to visit the factory and do end-of-line quality testing for our products now than when we were in China.  As a result we have much more face-to-face interactions with our manufacturing team.  That has resulted in improved quality off the production line and has fostered excellent collaboration which has helped us improve our hardware designs.

More affordable pricing with lower travel costs

We were surprised that we could find comparable pricing at factories so close to home, but the relative parity in COGS didn’t highlight the savings in other areas including shipping, duties and travel.  Managing an overseas factory can be very expensive especially when you’re not able to spread these costs over very large orders.

Just in time manufacturing improves cash flow

Another benefit we enjoy from going local is our ability to implement a just-in-time manufacturing strategy.  We have tighter control over our manufacturing runs and we’re able to respond more quickly to customer demand with our local factory.  This means we have less inventory on hand which improves our cash management.

Local manufacturing makes you stronger

Overall we’re happy with our decision to relocate our electronics production back to US shores.   It took a lot of work to find the right manufacturing partners, but now that we have them in place they have really strengthened our business.  Our suppliers are more consultative and they have helped us in ways we could never have imagined.

We’re glad that we’ve made the move back to the USA and we’re proud that we are one of the only fleet management system providers who still design, develop and manufacture their own hardware and build their own software right here in North America.    We’re part of a small (and shrinking) collection of OBD-2 and telematics fleet management and vehicle maintenance systems suppliers who can say that our products are made in the USA.

Now that we’ve grown and measure our customer base in the thousands and help those customers track their fleets in millions of miles driven being a made in the USA company means more than ever.  If you’re interested in learning from our experience we’d be happy to  share.  Get in touch!

photo credit: gp314 via photopin cc