Mel Redman said he and his son began planning to move the manufacturing of a 6-volt battery-operated toy car from China to northwest Arkansas after Redman & Associates was hit with unexpected price increases a couple of years ago.
When the decision was announced, it was in the company of the governor of Arkansas and representatives of Wal-Mart Stores Inc., which, in a stroke of lucky timing, had announced its plan to spend $50 billion on goods made in the United States during the next 10 years.
Redman & Associates worked as brokers for a Chinese manufacturer to place the units in Walmart stores. Redman, who is CEO of the company, said the decision to move manufacturing to Rogers was made after the Chinese manufacturer raised the cost of procuring the items after production in 2012.
“That’s when we started working on being independent from China,” Redman said. “We have to make goods in this country — somehow, some way — because this is a very unfair business practice when you get a price increase once you’ve already booked your goods.”
The units were once manufactured and assembled only in China, but now a portion of the order is being manufactured by Bentonville Plastics, owned by Terry Law, whom Mel Redman has known since his Wal-Mart days two decades ago. After Bentonville Plastics produces a unit’s main body, Redman & Associates assembles the complete vehicle, packages it and ships it to Walmart.
Redman said making the goods in the United States could eventually save approximately $7 million annually on shipping costs. There are also savings from distributing the units from the middle of the country instead of the port in Long Beach, California.
Another factor against production in China is the rise in energy costs there, which has led manufacturers being placed on an allotment schedule, Redman said, which could affect production at random times.
“We’ve been told we are the talk of China, and not in a good way,” Redman said. “We’ve been told this by the people we’ve done business with, because this is such a high-profile [move].”
Rodney Redman, Mel’s son and chief operating officer of Redman & Associates, said the Chinese manufacturer could unilaterally raise the price of 12-volt battery-powered cars, which are still solely manufactured overseas. But the Chinese manufacturer has less leverage over the 6-volt cars, which are being produced in both China and Arkansas. Rodney Redman said he believes Bentonville Plastics could fast-track the increase in production to compensate for any meddling with the 6-volt models.
Mel and Rodney Redman said Bentonville Plastics has produced nearly 20,000 units of the toy car. The Redmans are developing their own $350,000 machine capable of producing a non-assembled 6-volt car every 31 seconds, which will assist greatly in fulfilling the company’s goal of producing 600,000 units by 2016.
Redman & Associates plans for production to eventually take place at the company’s 270,000-SF warehouse adjacent to its headquarters.
Bentonville Plastics is also manufacturing the Buzzle Ball, an orb-shaped moveable puzzle toy, for sale in Walmart stores. Rodney Redman said early response has been positive, and the company’s goal is to eventually branch out into a multitude of plastic-based products.
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