March 17, 2014

Nearshoring a reality, leading toilet manufacturer says

Rising Chinese labor costs and nagging concerns over product obsolescence are changing the sourcing equation for some companies.

By DC Velocity Staff

Some companies talk a good nearshoring game. Toto USA and Toto Mexico, units of the world's leading toilet manufacturer, are doing it.

Co-keynoting the Modex conference Monday, William L. Strang, president, Americas - operations group, Toto USA and chairman of Toto Mexico, said the operation sources 73 percent of its products sold in the Americas from within the Americas. In 2003-2004, it sourced 70 percent of its Americas-sold products from Asia. Toto is headquartered in Japan.

In the Americas, Toto has three manufacturing facilities in the Atlanta metro area, one in Ontario, Calif., outside of Los Angeles, and another in Monterrey, Mexico. The relatively small facilities do an excellent job serving their respective territories, Strang said.

A steady increase in Chinese labor costs and nagging concerns over product obsolescence due to long waterborne transit times continue to fuel discussions, and in some cases action, about nearshoring, Strang said. "Asian headwinds are building up," he told the group.

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