Operational plan

Will Jacob Bromwell Continue to Manufacture Products in the USA?

Jacob Bromwell has manufactured all its products in the USA since its inception in 1819.  Although manufacturing in the United States is not the most cost-effective solution, our “Made in USA” appeal is a critical component of our marketing message and distinguishes us from our direct competitors.   Furthermore, “Made in USA” is becoming increasingly embraced by younger, more stylish consumers.   This is a major competitive advantage, and therefore, we will continue to manufacture all our products in America.

How Will Jacob Bromwell Improve Operational Efficiency?

We have determined that it is more cost-effective to shut down our plant in Michigan City, Indiana, and outsource our manufacturing to a third-party contract manufacturer in the United States.  After months of research, we have secured agreements with contract manufacturers.  These companies will manufacture, assemble, and label our products at their facility.  These companies also specialize in short-run metal stamping, and are experienced, knowledgeable, established (some in business for over 35 years), and are cost-competitive.

Under this new model, the manufacturing operations of the business that were previously done in-house will be outsourced, including:  product manufacturing, component parts manufacturing, product assembly, and labeling.

During Year 1, we will take advantage of MistyMate’s large warehouse facility to store, pack, and ship all of our inventory from Michigan City, Indiana.  However, once we sell through the inventory, our long-term plan is to outsource our order fulfillment needs to Shipwire, a third-party storage and shipping company with Class A warehouses throughout the United States.  All new products will ship directly from our contract manufacturers to their distribution centers.

Who Are Jacob Bromwell’s Suppliers?

Jacob Bromwell works with about a dozen U.S.-based raw material suppliers who provide us with tin, stainless steel, and steel.  Our new contract manufacturers will also be our suppliers for turning raw materials into finished product.

What Is Jacob Bromwell’s Value Chain?

Jacob Bromwell’s value chain is broken into five steps:

1. Step 1, In-Bound Logistics: Suppliers send raw materials and component parts directly to our contract manufacturers.
   
2. Step 2, Operations: Raw materials and component parts are converted into finished goods through the manufacturing process.
   
3. Step 3, Out-Bound Logistics: Product is shipped via ground transportation to our distribution center in Chandler, Arizona.  Product is held in inventory until they are shipped directly to our end-consumers via our website (B2C) or to our retail customers (B2B).
   
4. Step 4, Marketing & Sales: Product is sold via a dedicated sales force and sales reps directly to our end-consumers via our website (B2C) and to our retail customers (B2B).
   
5. Step 5, Service: We address customer needs and work to exceed their expectations.  Our goal is to retain customers for life.
   

During each step there are specific processes that are executed accordingly to successfully manufacture, market, and distribute each product to the end-consumer.

Figure 11 – The Porter Value Chain

Distribution Model

Which Channels Does Jacob Bromwell Sell Through?

Jacob Bromwell sells through four separate sales channels:

Figure 7 – Sales Channels, Gross Margins, and Percentage of Total Sales

As a specialty housewares company, Jacob Bromwell will only sell to select retail stores who are willing to pay a premium for our brand-name housewares.  Exclusivity is often underrated.  You can’t get a Pepsi at McDonald’s, and you can’t buy Hermes at Target.  By limiting choice, we will create value in our products.

What Are Jacob Bromwell’s Costs of Goods Sold Per Product?

With our new contract manufacturers, we will have an accurate understanding of our cost of sales for each product SKU.  This information will remain confidential, but our costs will allow us to operate at a 50 to 70 percent gross margin.