How We're Dealing With Broken Supply Chains - Oct 2021
Updates & Announcements - Oct 2021
It's been a busy year here at Motivx Tools. 2021 brought change to a lot of businesses and our company was no exception.
We headed into the year with ambitious plans (more on that below) and then supply chains broke down, shipping lead times got longer and material prices continued rising.
For example, we routinely manufacture our tools in Taiwan and ship them to our headquarters near Seattle for inspection, testing, packaging and fulfillment. This process involves shipping our tools via ocean freight in a 20' or 40' shipping container.
We just got a bill for our shipping container that was $16,515! For reference, that's about 10x the normal amount! And lead times are months longer than normal, if you can get a lead time at all. Material prices are skyrocketing and competition is high.
In short, the normal supply chains are broken. With no “fix” in sight.
The need to grow and adapt quickly was - and is - at an all time high.
In this post, we'll dive into the exciting new updates here at the company over the last year, and how we're dealing with some of the challenges that face us. These include bringing our manufacturing to the USA, redesigning existing products and dealing with rising prices.
The Vision To Bring Manufacturing To The USA
Long before the recent global shipping difficulties arose, we began considering how to start bringing our manufacturing to the USA. There were a few reasons for this:
- We like and support the idea of trying to grow USA-based manufacturing
- Manufacturing "in-house" gave us more flexibility to create new products and improve existing products
- We could continue to provide "best-in-class" tools while improving our quality control
- We could support other US-based manufacturers by using materials sourced in the US
- We liked the challenge
- We saw the opportunities for growth and customization that our own manufacturing facilities would provide
Laying The Groundwork - Phase 1
We already had a bit of a head start on this goal. By the summer of 2020, we had invested in manufacturing space, as well as prototyping and packaging equipment. We re-configured our existing 4000sq ft building into manufacturing space and expanding into an additional 2000sq ft of packaging and warehouse space. We also built out a full packaging assembly line and fulfillment bay with shrink tunnel, labeling, shipping and bulk processing capabilities.
We purchased a professional-grade 3D printer for prototyping. Or for printing unique business card holders just for fun.
We purchased a Epilog 60 watt CO2 laser for product customization and manufacturing capabilities. And to produce wood puzzles for a fun promotion.
We purchased a ShopSabre 12' x 6' 24,000RPM auto-tool-change router for creating packaging and manufacturing supplies. This produces our foam packaging and production laser templates. See our setup and first jobs and foam trays.
Manufacturing A "Made In The USA" Product - Phase 2
September 2020 saw us taking the plunge into a new phase of bringing our manufacturing to the US. The goal was to redesign our popular oil filter wrench line from the ground up.
It was an ambitious goal. Before we could produce our first "Made In The USA" product that was ready for sale, we had to sequence a lot of different projects.
The first step was acquiring a used 2003 Haas VF3 vertical mill. We then taught ourselves CAD/CAM, invested in tooling, ran a lot of trial and error tests (mostly error and definitely some trials), developed prototypes, and tested them repeatedly.
After multiple iterations, we finally had a product we were happy with. And it was a significant improvement to our already high quality lineup of oil filter wrenches.
Develop Mass Production Capabilities - Phase 3
Even with a solid product redesign, we still had to figure out how to mass-produce these wrenches before we could sell them. This included figuring out USA-sourced materials, anodizing suppliers, laser templates, new packaging, workholding for multiple milling operations and systems to keep it all running.
This took longer than expected, but we eventually got a workable system in place and finished parts ready to sell.
Product Launch - Phase 4
After months of investing in this new line, we successfully launched our first "Made In The USA" product - a completely reworked version of our extremely popular oil filter wrench for Toyota vehicles.
This new design is patent pending and had many upgrades, including an extra-durable interchangeable "drive hub", better fitment for popular filters, and an upgraded and customizable look and feel.
Expanded Product Line And Increased Capacity - Phase 5
Once our first Made In The USA product successfully launched, we quickly expanded into redesigning our other filter wrenches. These were also launched over the next few months.
Increasing demand led to us purchasing a second vertical mill, another Haas VF3SS. After getting it online, we expanded to multiple shifts, increasing our production output significantly.
The next months saw increasing production efficiency and a launch of brand new oil filter wrench sizes. These new sizes are available as of Oct 2021 and cover many of the popular factory spin-on filters. This brings our "Made In The USA" products to over a dozen, with more on the way!
Made In USA Oil Filter Wrenches - Oct 2021
An example of one of our new wrenches is the MX2361-US, a wrench specifically designed for the popular spin-on Allison transmission filter. This is a great example of a product that we were able to quickly design and produce because of our domestic manufacturing capabilities.
The Future - Supply Chain Issues, Price Increases, etc...???
As it turns out, the past year has also been incredibly volatile. This is true for many business, especially those with an international shipping or trade component. We are encouraged by the results of our push towards USA manufacturing, and we think it has already helped us weather the storm of international shipping issues.
However, even the companies that we work with in the USA are feeling the pressure. Materials sourced in the USA are getting pricier, with lead times growing significantly longer and more unstable.
The Supply Chain Is Broken - What Are We Doing About It?
These supply chain problems have led to our biggest issue so far - being out of stock on product. We are countering this by increasing the time we allow for raw materials or products to be produced and shipped to us, and ordering more quantities to deal with the longer lead times. We are also committed to:
- Pursuing more domestic manufacturing
- Finding better ways to source and produce additional product lines at our manufacturing facilities
- Regaining more control over sourcing and lead times.
To this point, we have not had to raise prices, and have absorbed these costs in a variety of ways. However, as these supply chain issues continue, we do anticipate temporary and even permanent price increases for many of our products. The price for shipping and raw materials is going up dramatically, in some cases by 10x the cost this time last year.
To get ahead of this, we recommend making sure you are subscribed to our email newsletter so that you get access to exclusive sales, and so you get advanced warning when prices are going to increase.
Shipping Is Broken - What Are We Doing About It?
We also realize that domestic shipping in the US is getting more and more difficult. As of March 2020, UPS announced that they "suspended the UPS® Service Guarantee for all shipments from any origin to any destination". We have also noticed delays from many other shipping and fulfillment channels.
We've always offered a free shipping option on products ordered on our website, and we plan to continue that program. We are also actively working on a program to provide free or very low cost 2-day or next day shipping for large parts of the US. As we enter the holiday season, we only anticipate shipping getting more congested, so we recommend you order early if purchasing our tools as a gift.
We Appreciate Your Support
For those of you who have purchased from or followed Motivx Tools, we would like to say "thank you"! Through your support, we are committed to continuing to invest in American manufacturing, to expanding and improving our capabilities and to maintaining exceptional customer service based right here in the USA.
It's our commitment to continue to provide you high-quality, professional-grade tools so you can get the job done right the first time.
The Motivx Team
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