From: lessgovt@gmail.com   
      
   A Soap Maker Cracks the Code to ‘Made in America’   
   By Austen Hufford, July 25, 2023, WSJ   
   NEW ALBANY, Ohio—A $7.95 bottle of Bath & Body Works foaming hand soap used   
   to take 3 months to put together. The pieces had to travel more than 13,000   
   miles from China, Canada and Virginia to the company’s Ohio distribution   
   center.   
      
   Bath & Body Works decided it needed to get new products to market more   
   quickly. The result was a production initiative with little parallel in   
   corporate America.    
      
   Now every step of production occurs at plants just feet from each other on the   
   company’s dedicated “beauty park” on the outskirts of Columbus. One   
   factory makes the foaming pump and mechanism. Another makes the bottle itself,   
   a third makes the    
   label, a fourth makes the soap, fills the bottle, attaches the label and   
   screws on the top. A fifth packages it. Getting a bottle to distribution is   
   down to 21 days and a few miles. A majority of Bath & Body Works products,   
   which are sold in its own    
   stores, are made on site.    
      
   The effort, which started in 2008, required a lot of negotiation with   
   sometimes skeptical suppliers. The campus includes 10 manufacturers and   
   millions of square feet of production and warehouse spaces, with 5,000   
   employees working there during peak    
   production. Bath & Body Works had sales of $7.56 billion last year, increasing   
   annual revenue by more than $2 billion since 2019.   
      
   “I look at BBW as a composer and a conductor of a symphony,” said Bath &   
   Body Works supply-chain executive Susanna Zhu.    
      
   Bringing production closer to home, often called “reshoring,” has become a   
   priority for many companies. Disruptions from Covid-19, severe weather, trade   
   wars, geopolitical tensions and stuck ships left consumers without the couches   
   and hot tubs they    
   wanted. The Biden admin is spending hundreds of billions of dollars aimed at   
   boosting the domestic presence of industries deemed strategic, including   
   electric cars, batteries and semiconductors.   
      
   The government money, along with roaring consumer demand and persistent   
   supply-chain issues, are leading to a factory building boom, with spending at   
   its highest level in at least 20 years. Over the next decade, public and   
   private investment will amount    
   to $3.5 trillion, the govt estimates.   
      
   Bath & Body Works’ initiative proved particularly helpful during the   
   pandemic. While competitors struggled with shortages, BBW’s suppliers on   
   location shared raw materials and even employees to make more hand sanitizer   
   and other in-demand goods.   
      
   CEO Gina Boswell said locating corporate executives just a short drive away   
   from key manufacturers allows problems to be fixed and new products developed   
   quickly.    
      
   “That’s magical, especially when you need speed and agility,” she said.   
      
   The company, which like many retailers benefited from increased consumer   
   spending in the pandemic, said sales could fall this year.    
      
   One challenge to replicating BBW’s model is that factories don’t operate   
   in bubbles, but rely on networks of suppliers, parts and expertise—and   
   moving those networks is costly. Once such a network has been established, it   
   tends to get stuck there.    
      
   Land, labor and compliance with enviro and zoning laws also generally cost   
   more in the U.S. than in China and developing countries.   
      
   What works for soap and the two dozen other products BBW makes won’t   
   necessarily translate to smartphones, blenders or even backpacks with highly   
   specialized supply chains deeply rooted in Asia.    
      
   Semiconductor manufacturers and raw steel producers require massive upfront   
   investment and economies of scale. The BBW model is better suited to   
   exploiting economies of scope, in which a manufacturer produces a variety of   
   products. Bath & Body Works can    
   roll out around 7,000 new scented products a year.   
      
   BBW, whose HQ is about 10 miles from the beauty park, was founded by Les   
   Wexner as part of his retail conglomerate, L Brands. The body-products seller   
   grew from 27 stores in 1990 to more than 1,000 in 1999 and 1,810 as of April.   
   In 2021 L Brands spun off    
   its Victoria’s Secret lingerie stores and changed its name to Bath & Body   
   Works, focusing exclusively on that brand.    
      
   For its beauty campus, the company chose New Albany, a planned community close   
   to a major highway and a day’s drive from nearly half the country’s   
   population.    
      
   New Albany wanted to diversify its white-collar economy. To entice BBW, the   
   city created zoning and installed infrastructure at a cost of $6 million to   
   itself and $3 million from the state. The early factories opened on the   
   450-acre site in 2011.   
      
   To make it happen, BBW had to persuade its best suppliers to move. The plus   
   for suppliers was continuing to do business with a fast-growing skin-care   
   seller—with volume guarantees from BBW for a set number of years. The minus:   
   spending millions to    
   relocate production and buy new equipment.    
      
   Rieke Packaging, which makes dispensing pumps for soap bottles, didn’t know   
   if it was going to be worth the investment. At the time, Rieke made the pump   
   at factories in China. Rieke had an existing factory a few hours away in   
   Indiana that could    
   potentially supply the park, but Bath & Body Works said it wanted factories   
   on-site.    
      
   “From a supplier perspective, there was a lot of resistance,” said Craig   
   Miller, who worked for Rieke at the time and now works in supply chain and   
   manufacturing for a pharmaceutical company. “You want us to buy more   
   equipment. Our lease rate is    
   going to be double what it’s going to be in rural Indiana. Come on, that   
   doesn’t sound any fun.”    
      
   Rieke decided to make the several-million dollar investment in New Albany.   
   “It was too big of an opportunity to pass up,” Miller said.     
      
   Moving production to Ohio wasn’t easy. Factories had to contend with   
   planning officials, high labor and construction costs and even endangered bats.   
      
      
   [continued in next message]   
      
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