There is an interesting article in Rifle magazine this month on this very topic. The article is written by John Barrsness (author of Optics for the Hunter). Basically he says that if you think your American made scope has only American made parts in it, you need to think again. He says that many of the sub pieces of the scopes are made in all parts of the world then assembled in the USA - giving the impression that Made in America means of parts from America...........
This is true. Leupolds are assembled from Chinese and Japanese parts.
How a U.S. Optics Manufacturer Monitors Its Asian Suppliers
Price, availability of supplies and the desire to enter Pacific Rim markets were the driving forces behind optic manufacturer Leupold & Steven’s expansion into Asia. The optical glass used in Leupold’s rifle scopes and binoculars is available mainly in Asia, with a few manufacturers in Germany and some extremely high quality (and expensive) manufacturers in the U.S.
The challenge, for Leupold & Stevens, was to become competitive in its line of ancillary products, like covers and lens filters. They began working with some Asian suppliers about five years ago “in a limited way,” says Peter Lemon, materials manager. That gave the company affordable optical glass for its award-winning products and access to local markets. Then, when Wal-Mart because a customer in 2003, “we dramatically increased the amount of goods we procured overseas,” and built upon that, adding a new, more affordable line of binoculars to its product mix, expanding relationships with existing suppliers and courting new ones. The result is an increase of 300 percent on gross revenues from the ancillary products Leupold sources overseas.
The optics market, Lemon explains, is a small niche industry with many companies vying for the same resources. Maintaining a wining mix of reliable suppliers goes beyond commercial interests to what the Chinese call guanxi—the mix of friendships and connections that is the very fabric of business throughout Asia.
“Our relationships with suppliers go beyond commercial relationships,” he says. That means flying there when a supplier opens a new facility, and getting to know suppliers’ likes, dislikes, families and even the pet canary. When associates visit the U.S., it means entertaining on a personal level with, perhaps, a fishing trip thrown in for fun. That level of personal interaction builds strong relationships based on more than mere commercial interests that, in turn, give Leupold the greatest potential for keeping its intellectual property safe and for expanding its business with reliable, reputable suppliers. The result is a win-win situation for both parties.
That said, there have been some bumps along the way. Generally speaking, “Asian suppliers tend to over-commit themselves,” Lemon says, with the extent of the over-commitment varying by country. To dissuade such over-enthusiasm, Leupold & Stevens has developed “aggressive agreements with penalties for failure to perform,” but, Lemon says, “they are balanced against the risk of souring an otherwise good relationship.”
The preferred solution, he says, is to offer management help. When launching a new series of range-finder scopes manufactured overseas, for example, the designs weren’t finished on time, he recalls. Leupold’s solution was to put a man on the ground for about three months, living and working alongside the supplier’s staff. The project got back on track.
Protecting intellectual property is another key issue that can be particularly frustrating in emerging economies because many don’t really understand how anyone can own an idea or a process and intellectual property protection sometimes only applies to certain categories of items and not others.
Like many companies with vital patents, Leupold & Stevens keeps its most valuable intellectual property in its own facilities. The result is that only portions of some new products are outsourced. Such care is only partial protection, however. In China, another company is using the Leupold name. The situation is being resolved in the Chinese courts, but the concepts of intellectual property and trade names are still evolving, and sometimes differ from those of Western nations. His understanding, Lemon says, is that, “Whoever files for the name first gets it. It’s a very difficult situation.”
Article from World Trade Magazine, Digital Edition
