Speed-to-market demands, product innovation and logistics considerations are helping RadioShack Corp. to keep some plastics processing operations running in the United States, even as the consumer electronics retailing giant acknowledges the need to source globally and make some products at its plant in China.
``We have to be nimble and quick,'' said William S. Paxton, the Fort Worth, Texas-based company's president for North American manufacturing. In an April 23 telephone interview, he said RadioShack has improved greatly in that regard in the past few years, by strengthening its product development group and improving its processes.
RadioShack - with 39,000 employees, 7,200 retail stores nationwide and annual sales of nearly $4.5 billion - is one of the better-known brands in the United States. It claims that 94 percent of all Americans live or work within five minutes of one of its stores.
Its manufacturing operations, with seven U.S. plants and one in China, are publicized less widely, but still are significant. The company has a wire and cable production plant in Fort Worth that consumes 500,000 pounds of copper rod and 630,000 pounds of plastic resin per month, said Paxton, who joined the firm in 1987 and assumed his current role in May 2000.
That plant runs 14 extrusion lines 20 hours a day, four days a week, to coat wire and cable. The firm uses polyethylene in its coaxial cable jackets and PVC on most of the rest of the products. Paxton said the plant also uses an in-line, nitrogen-injection, foam-extrusion process that produces improved dielectric insulation properties for some of the coax cable by injecting 15 percent more air into the jacket.
In Swannanoa, N.C., meanwhile, about 10 miles east of Asheville, a nine-person department of another RadioShack unit runs eight older Van Dorn injection molding machines round-the-clock to make plastic housings for various amplifiers, modulators and antennae. That 140-employee facility, known as TDP Electronics, uses mostly ABS and high-impact polystyrene.
Erwin Hani, as mechanical engineering manager, oversees industrial design efforts at the plant. RadioShack acquired the antenna-manufacturing facility from RCA 20 years ago and, in addition to making RadioShack components, still does private-label manufacturing there for RCA, now part of Thomson Multimedia. Hani sees much potential in products and accessories related to high-definition television, and in-home audio and video signal distribution.
``HDTV is providing new opportunities,'' Hani said in an interview at an Industrial De- signers Society of America conference in Lake Lanier, Ga., in early April. So RadioShack - both at its Antennacraft plant in Burlington, Iowa, and at TDP - is busy developing four HDTV-targeted antenna and amplifier products that Paxton said should start shipping this summer.
The firm also is close to launching a stereo video modulator that enables a video signal to run through a single coaxial cable. That enables the picture from popular gaming devices such as Sony's PlayStation2 to be displayed on a television screen. Paxton said the product will be the first sub-$200 stereo model to hit the market, but he has no illusions that RadioShack will have that market to itself for long.
Between May and October, RadioShack expects to produce 50,000-100,000 of the devices in the United States to get them onto store shelves quickly, but ``long-term, manufacturing ultimately will be done in China,'' according to Paxton.
``It's getting tougher and tougher to compete,'' he said. ``Our buyers need to compete globally,'' so they go wherever they have to go to remain competitive.
The company is increasing its use of automation, and relies on units such as TDP to provide a quick time-to-market advantage at the front end of new product launches before shifting large-scale production abroad. Hani said the Swannanoa plant is working closely now with RadioShack's China plant to make mated parts for the same product that must look identical and fit together perfectly. That facility, based in Huizhou, near Hong Kong, runs 29 injection presses and consumes more than 713,000 pounds per year of resin.
``This is the first project on which we're doing this,'' he said, referring to the stereo video modulator. ``This is where we feel we [at TDP] can perform the best'' - to work parallel with the China plant to develop products quickly.
Paxton agreed, noting that RadioShack on several occasions has investigated outsourcing the work from the North Carolina plant, but given the types of jobs in question, it has concluded ``we can produce product cheaper than we can outsource.'' TDP has low overhead and a strong design group that, when needed, also supports other RadioShack units.
When it comes to plastics, Hani and Paxton constantly are on the lookout for new products and processes that can offer solutions. Surface finish is a topic of great interest to both.
``Customers want the metallic look,'' Hani noted. ``We can't mold that without aesthetic problems, so we need to paint it,'' which currently means sending such jobs to China.
``I don't want to get into the painting business,'' declared Paxton. ``I won't do that.''
So, instead, the company actively is searching for ways to injection mold or extrude plastics that yield the desired colors and quality finishes.
``We understand there will probably be a higher material cost,'' Hani said, ``but we'll save on labor, shipping and it will allow for faster speed to market.''