Even a small business can manufacture responsibly and thrive.
When Jaime and myself decided to start MIO, the first question I asked my brother was “when is our first trip to China?” My business background and previous work experience at a large corporation had taught me many things. The main one was that in order to guarantee success we had to find the lowest cost producer, which for me meant looking for suppliers abroad. My idea was to get these low cost factories to manufacture our designs so we could sell them at maximum profit: ECON 101. Needless to say I had a lot to learn about sustainability.
Fast forward a few years, the US economy was booming and manufacturing operations across the US were being offshored to low cost producers worldwide. Meanwhile, MIO was slowly but surely building an impressive network of domestic manufacturers. A lot of the factories we visited were a 30 minute car ride away, others were literally across the street. The relationships we built with local companies proved to be one of MIO’s most important assets.
We don’t worry about who is making our products or the working conditions of these factories. We know the factory owners, the employees and even the raw material suppliers. By designing and manufacturing locally we are helping our suppliers guarantee fair living wages for their employees. We are a profitable, small and growing company that helps generate fair paying jobs in the US! This is when I realized that what we are doing transcended my ECON 101 class. From a purely financial standpoint, we might be “giving up” some profitability, but we would be ignoring the hidden costs of operating without a triple bottom line. The additional margins would come at an important social and environmental cost.
Lower wages, in an already low wage country, would have meant reallocating resources from communities and individuals with limited opportunities. The environmental implications were considerable as well. Manufacturing abroad meant our suppliers would abide by their local environmental standards, which in many countries are lower or close to non-existent. The sourcing of the raw materials was also an important challenge. Many of the lower cost producing countries (including China) allow recycled materials such as paper, plastic and cardboard in contact with questionable substances and in precarious environments. If we decided to manufacture abroad, we would be subjecting not only the factory employees but our customers to unknown risks, and for us that is simply not an option.
Then there is the inevitable implication of the additional logistical carbon footprint. It’s one thing to ship a tractor trailer 100 miles from the factory, quite another to ship containers over from China. The environmental impact of packing, trucking, loading and unloading containers coming from the other side of the planet adds up quickly.
When you consider all these implications, the idea of “doing well” takes on a whole new dimension. Do we really want to be a company that maximizes profits regardless of the true social and environmental costs? Would we wake up every morning and feel good, knowing that we would be hindering people’s opportunities in a country on the other side of the globe just to make more money? In the end the answers were pretty obvious. Responsible design and business practices have made a difference in our growth and our focus. At MIO doing well really means doing good.