Among America's growth industries, none seem to value the importance of company culture more than the Outdoor Industry. OI companies and the trade groups that support them -- including the Outdoor Industry Association, its powerful national mouthpiece -- are today leaders in sustainability, climate and environmental awareness, diversity, employee empowerment and other progressive values. It's commendable stuff.
Yet a challenge for many OI companies is ensuring these admirable tenets extend across supply chains that stretch from here to Asia. Most domestic OI companies make things, and most of them make things offshore. Materials, labor, expertise -- the industry's manufacturing supply chain -- have largely been offshored.
OI brands have become master supply-chain managers, if not domestic manufacturers. In the best cases, owners and operators have developed relationships with offshore factories that extend a brand's core values, manifest in how materials are sourced, products are made, and employees are managed.
But let's be real. Qualities that define a company can be lost along the way, stopped cold by distance, the vastness of the Asian production ecosystem, and cultural differences. More, supply chains stretching from here to Asia are highly unsustainable compared to a domestic counterpart. And the machinations of designing and prototyping products locally, only to marry them up with an overseas factory to refine the prototype and manufacture, present ongoing challenges.
Yes, factories in Asia are modern and efficient: how else to explain the fantastic products and high level of quality emanating from most American OI brands? And many companies manage, over time, to find production partners that become reasonable extensions of the U.S. company they build for. (For an example, read our Krimson Klover feature from last week.)
But they're Asian companies! OI's investment in Chinese human capital and infrastructure alone, is staggering. That U.S. corporations aren't making those investments in the U.S. manufacturing commons is the irreconcilable piece of the brand extension game. It's also the most underreported story in the outdoor industry.
It's easy to understand why: The biggest and most outspoken brands in the outdoor world are investing millions in materials, workforce development, technology, and machinery in Asia. It's not a story that VF Corporation's PR team is rushing to get published.
The Industry's trade groups follow along. Protecting public lands in Utah was a priority for OIA. Adding substantial manufacturing and production content to the educational track of Outdoor Retailer? Not so much. Developing a 21st-century U.S. production ecosystem doesn't seem a priority for its largest sponsors and stakeholders. It would shine light on an issue that OI leadership would prefer remain behind the Asian production wall.
This then, is OI's crossroads as the decade begins. Yes, brands like Patagonia, Under Armour, even Nike, are investing in U.S. factories. It's not enough. Until domestic production is a central part of the industry ethos, OI companies will continue to manage bifurcated organizations where the brand promises a company lives by matter to only parts of the business.
It's no less than an existential decision, a "Boeing moment". Last year, The Atlantic's Jerry Useem summed up Boeing's current crisis by citing a single event: the decision in May of 2001 to move of 500 executives to Chicago away from 30,000 engineers in Washington. "The present 737 Max disaster can be traced back," Useem said, "to the moment Boeing's leadership decided to divorce itself from the firm's own culture."
Today, some OI companies have divorced themselves from the culture their customers value. In 2020, we'll focus a lens on companies choosing the road often less traveled; companies working hard to ensure that brand promises are best kept by shortening a supply chain, by investing in local talent and local entrepreneurs.
It's the least we can do to advance their cause, and that of American manufacturing. Today they’re one and the same.
Bart Taylor is publisher of CompanyWeek. Reach him at email@example.com.