Coming to America . . . More Manufacturing
Made in America returns!
Consumer-goods supplier Reckitt Benckiser is looking to respond faster to shifts in demand for over-the-counter pharmaceuticals by moving more of its manufacturing to the U.S., its largest market.
Reckitt is investing $200 million into a factory in Wilson, N.C., that it acquired last month, part of an effort to rewire its supply chain to meet more unpredictable drug demand since the Covid-19 pandemic. The company plans to use the site, acquired from Switzerland-based drugmaker Sandoz Group, to make Mucinex cough and cold medicines.
A surge in Covid-19 infections this past summer boosted demand for cold medicine at a time of the year when drugmakers are typically restocking in preparation for the busy fall and winter cold and flu seasons, said Chris Tedesco, the U.K.-based company’s senior vice president for health in North America. Tedesco said.
“We see much more volatility, not only in the season but also even outside of the season. What we’re trying to do is ensure that by moving production closer to market, we can be much more agile to service our customers better and respond to this volatility in consumer demand.”
The company plans to shift some production of Mucinex in liquid and tablet form from factories in Mexico and the U.K. to its new North Carolina plant! Reckitt estimated the site will reduce the time it takes to make the medications and get them onto drugstore shelves by about four weeks for tablets and three weeks for liquids.
The company has six other U.S. manufacturing sites where it makes household products such as Finish dishwashing detergent, Enfamil baby formula and various vitamins and supplements. It has been shifting more manufacturing closer to North America and configuring its plants so that several of them can make various products, helping Reckitt avoid the sort of disruptions that caused product out-of-stocks and overstocks during the pandemic, Tedesco said.
Reckitt’s new manufacturing plant is an example of the kinds of investments companies across industries are making as they attempt to brace their supply chains against the ocean-shipping snarls, factory shutdowns and parts shortages that have led to too little or too much product, said Justin Kistler, a supply-chain management professor at the University of Tennessee.
Consumer giant Newell Brands has moved production of Sharpie retractable pens, Oster blenders and other items to plants in the U.S. and Mexico from China. Toy maker Mattel has restructured its supply chain to make some high-demand items in Mexico, close to U.S. customers. GE Appliances, one of the largest home-appliances manufacturers in the U.S., has shifted more manufacturing into the U.S. from Asia.
For many companies, the strategy is aiming at both minimizing exposure to disruptions by shortening supply chains and spreading risk. Several sites can pick up the slack if one location is blocked.
Many companies are finding the strategy is not having too many eggs in one basket. This, regardless of what type of company we are,” Kistler said. Adding a production facility closer to customers “may cost us a little bit more in the short term, but it just gives us the ability to be a lot more flexible and agile,” he said.
Reckitt Prescribes More U.S. Production for Drug Supply Chain – WSJ
AB: Gee what a surprise! They discover it is less costly in the long run. No more 5 weeks on the ocean plus in Customs and land transportation.
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