BENTONVILLE -- With time to kill Tuesday morning before a crucial pitch meeting, Monster Moto CEO Alex Keechle rode one of his company's mini motorcycles down a hallway of the Wal-Mart Stores Inc. home office.
Keechle was enthusiastically showing off the product to people who had gathered outside a meeting room. Like hundreds of other vendors gathered at Wal-Mart's Supplier Open Call event Tuesday, Keechle was hoping his Louisiana-based company could secure business from the world's largest retailer.
"This could be a life-changing day," Keechle said. "We spent the last year doing due diligence. Now we're ready to say we're making the move and we're ready to be part of this initiative."
Wal-Mart held the open call event for a second year, part of its commitment to source an additional $250 billion in American-made products by 2023. The initiative was announced three years ago by Wal-Mart.
Keechle didn't leave with guaranteed business from Wal-Mart, but he did garner enough interest that the retailer scheduled follow-up meetings.
Monster Moto represents one of three categories of suppliers that Wal-Mart is mining for its U.S.-made initiative. The children's motorcycle and go-kart company already has a presence on WalMart.com and is looking to expand into the retailer's nearly 4,000 stores.
Wal-Mart is also looking for new products and for goods manufactured abroad by companies willing to return production to the U.S.
Amazon, Kmart and Home Depot are already selling Monster Moto products, but the company, which opened a 100,000-square-foot plant and announced plans to hire 270 in April, views Wal-Mart as an important part of its growth. Monster Moto has plans for a 300,000-square-foot plant in the future and is relocating production from China.
"We are confident, very confident, we can be competitive," said consultant Olen B. Rice III of Northern Group in Minneapolis, who was part of the Monster Moto pitch. "We think there can be advantages to manufacturing here."
Citing a Boston Consulting Group study, Michelle Gloeckler, executive vice president of U.S. manufacturing for Wal-Mart U.S., said that every manufacturing job created leads to an additional three jobs in a given community.
"It makes a difference in communities, not only for workers in that particular factory, but also for all the businesses surrounding it," Gloeckler said.
Manufacturers have been reluctant to return operations to the U.S. for a variety of reasons, most related to cost. That price difference between manufacturing domestically or overseas is closing, suppliers were told during Tuesday's event.
A presentation from the Boston Consulting Group during Tuesday's event indicated that costs, particularly those related to labor, continue to rise in China. When evaluating the costs of labor, materials, overhead and importing, the savings realized by manufacturing overseas have shrunk to their lowest level in decades, according to a presentation from Mike Zinser of the Boston Consulting Group.
Zinser spoke during a morning session of Wal-Mart's Supplier Academy titled "Trends in U.S. Manufacturing Competitiveness."
"What we're watching is a fundamental change," Zinser said. "It's not surprising that this has happened."
Apparel continues to be a challenge for retailers to source U.S.-made goods. Labor remains cheaper overseas and many of the skills used are no longer prevalent in the U.S.
One of the apparel-focused pitches Wal-Mart heard Tuesday was from Ozark Mountain Outfitters. Devin O'Dea pitched a concept for an outdoor lifestyle line of T-shirts. Ozark Mountain Outfitters earned a follow-up meeting with the retailer, whose representatives in the meeting expressed concern with the concept being brand-heavy and needing six months to produce its first line of T-shirts.
O'Dea, co-founder of specialized outdoor brand Fayettechill, said even though he left without a deal in place, it was a productive meeting.
"I learned a lot. It was good conversation," O'Dea said. "Wal-Mart is a different challenge because we want to scale up for a mass audience who wants to actively vote with their dollar and pick a more expensive option. That's a challenge."
Wal-Mart is hosting the open call event and today's Manufacturing Summit in hopes of helping suppliers navigate those challenges. The two-day event concludes today and is in Arkansas for the first time after previous stops in Orlando, Fla., and Denver.
Gov. Asa Hutchinson will participate in a session to open the manufacturing event today at Bentonville High School. Hutchinson and representatives from the Arkansas Economic Development Commission join government officials from 29 others states at the conference.
Wal-Mart organized the event to encourage conversation between manufacturers and economic development authorities from across the country. Gloeckler said Wal-Mart will facilitate "over 1,000 meetings."
"We want you to be better for having traveled here," Gloeckler said.
Business on 07/08/2015