Will parents pay more for US made baby cribs ?

An article in the Wall Street Journal (May 22, 2012) describes a decision by Stanley Furniture to move production of its baby cribs to Robbinsville, NC from China. Four reasons cited are (a) the worries about poor quality products (think pet foods, lead paint in toys etc) from China and it impact on children, (b) increased productivity in the US plant with automation playing a role, (c) grandparents sharing in part of the purchase costs, thus justifying a higher spend and (c) a large selection of over 85 colors. The company moved production to the US despite a hourly wage in Asia of 63 cents per hour vs a US wage from $ 10 to $ 18/hour. But the expectation is that consumers will pay $ 700 for a crib that could otherwise be sold for $ 400 if imported. Will safety considerations be sufficient to convince a large enough group of consumers to pay for the US made crib ? Given the continued focus on productivity required to justify US manufacturing, how will the shift in costs from labor to capital impact the firm ? How will the efficient manufacturing of the greater variety be managed in the US, or will it require longer delivery lead times ?

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , . Bookmark the permalink.

One Response to Will parents pay more for US made baby cribs ?

  1. Cribs are like airplanes: if something goes wrong someone is very likely to be seriously hurt or die. Stanley shouldn’t have watered down their reason with talk of grandparents and color selection. Safety for consumers, productivity for stockholders.
    Since they are manufacturing in the US, they should take advantage of the shorter lead times and try some new marketing options. Custom cribs?

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