Our Guest Post comes from Prof. Howard Weiss, who created the ExcelOM and POM software that we provide free to our readers.
Lynn Massachusetts In colonial days shoemakers had a capacity of roughly 5 shoes–not pairs–per day. The industrial revolution moved shoe manufacturing to factories, increasing capacity to 50 pairs per day. In 1883, Jan Matzeliger of Lynn, Massachusetts patented a machine that would use a wooden mold to form the leather top of the shoe and then attach it to the bottom. The new machine replaced this step (called lasting) which was performed by hand by skilled shoemakers. And it increased the capacity to 750 pairs per day while reducing the price of shoes by 50%.
Figure 8.1 of your Heizer/Render/Munson textbook mentions several factors for a successful location which we examine now with respect to shoe manufacturing.
Labor talent Due to the continuous flow of skilled shoemakers into the state, 234 shoe manufacturers chose Lynn as their location and manufactured over 1,000,000 pairs per day. This made Lynn the Shoe Manufacturing Capital of the World. The state of Massachusetts produced more shoes than anywhere else in the U.S. through World War I.
Leon, Mexico Today, however, over 90% of shoes bought in the U.S. are not manufactured here. One of the major manufacturing locations is Leon, in the state of Guanajuato, Mexico which currently has over 3,000 shoe manufacturers including Nike, Converse, Crocs, Skechers and New Balance. This makes Leon the current Shoe Manufacturing Capital of the World. There are several reasons for this:
Location of markets Leon is located roughly 250 miles northwest of Mexico City and has easy highway access to other cities in Mexico and to the U.S. through the 45 U.S.-Mexico border crossings. Mexico’s infrastructure is in excellent shape as are its highways. Shipments by truck to the U.S. take no more than 3 days, and to Latin America no more than 7 days. Guanajuato has an international airport with flights to cities in Mexico and L.A., Houston, Chicago and Dallas. Shipments to Europe take less than 2 weeks.
Labor talent again Mexico has had large influx of skilled leatherworkers from Europe.
Proximity to raw materials/supply chain One of the key materials needed to manufacture shoes is leather and there are nearly 700 leather tanneries in Guanajuato providing this raw material.
Classroom discussion questions:
- What major manufacturer or service organization is located near your home or school and what were the factors for selecting that location?
- What is the effect of NAFTA in selling shoes manufactured in Mexico in the United States?