Strange business practices?

[Harry P.]

OK... let me start by saying I am not some sort if "industry insider"... I don't have any inside information or knowledge of how model manufacturers operate, or why, but I saw something today that got me wondering...

I picked up this kit at Hobby Lobby today:

When I opened it, I was surprised at how well it was packed... all the trees were bagged, all the bags were taped securely shut. But what really surprised me was the small paper tags inside each plastic bag that actually identified the contents of each bag ("Bag white engine, wheels, chassis," "Bag white body, interior." "Bag tires," etc.) A little bit of overkill, but whatever.

However, what really surprised me the most was that each tag also said "Made in Poland."

I didn't know that Revell had production in Poland, so I was curious, and I looked at the box.

"Plastic parts molded in Poland."

"Printed in China."

"Packaged in USA."

Is that really the most economical way to do it? Parts made in Poland, box printed in China, and then everything shipped here so it can be "packaged" in the USA??? Seems like a very convoluted way to make a model kit, but like I said, I don't have any inside info...

[Zoom Zoom]

Revell AG kits are molded in Poland, not China. They have the molds...send the bagged parts to US.

If boxes are made in China, that's where Revell USA must get them.

They get packaged in the US to get around tariffs for "complete" items. So it's actually cheapest to do this.

It is no different really from any Revell US kit. Molded in China, shipped "unfinished", packaged in US. The only difference in this case is the bags of model kit parts are coming from Poland, not China.

[stewart]

That is really funny. However, that must be the most economical way. I can't imagine them trying to make the process cost more.

STewart

[ra7c7er]

I don't know the economics behind it but I really wish Revell USA would adopt the identifying parts tags or ANY of the American companies would print the parts trees.

[Erik Smith]

You wouldn't think this system would work, but it obviously holds some advantages or they wouldn't do it. I thought the same thing when I was looking at a box of Revell's "Big John" '41 Willys Gasser. Plastic parts molded in China, photo etch part made in Czech Republic, and printed and packed in the USA. The newest Revell kits only say "made in China" - no USA involvement beyond putting it on the shelves once the plans are done.

Just a couple parts sourced is not a big surprise. Computers, cell phones, etc have hundreds of parts sourced around the world and assembled else where. It will be interesting to see where globalization gets us in the long run...

[Rob Hall]

Just the nature of the global supply chain in modern business...

[Harry P.]

You wouldn't think this system would work, but it obviously holds some advantages or they wouldn't do it.

Right, as crazy as it seems, it must actually be the cheapest way to do it.

But if they make the parts in Poland and then ship them here so that the kits can be "packaged" in the US, how do the parts trees get here? Are they pre-sorted by kit and shipped over here in huge crates? So they're paying people in Poland to put the trees in plastic bags and sort them in some manner and then paying to ship them here, then they're paying people here to unpack the crates, assemble the correct selection of trees to make a complete kit, and then place the correct trees into the box that was printed in and shipped from China?

Like you said, it must be the best way to do it or they wouldn't do it that way, but man, it sure seems goofy.

[ra7c7er]

Right, as crazy as it seems, it must actually be the cheapest way to do it.

But if they make the parts in Poland and then ship them here so that the kits can be "packaged" in the US, how do the parts trees get here? Are they pre-sorted by kit and shipped over here in huge crates? So they're paying people in Poland to put the trees in plastic bags and sort them in some manner and then paying to ship them here, then they're paying people here to unpack the crates, assemble the correct selection of trees to make a complete kit, and then place the correct trees into the box that was printed in and shipped from China?

Like you said, it must be the best way to do it or they wouldn't do it that way, but man, it sure seems goofy.

It is goofy. It's really strange to think that it is cheaper to ship all this stuff half way around the world a couple times rather than get it all made in one place.

[Marc @ MPC Motorsports]

Lots of four-color, high end printing is being done in China these days, which would explain the box.

[Luc Janssens]

Harry,

You should see the parts flow for the assembly of a 1:1 automobile.

[jw78z28]

Harry,

You should see the parts flow for the assembly of a 1:1 automobile.

i just got laid off today because of the damage in japan. can,t get any parts to build the brakes.

[Harry P.]

Harry,

You should see the parts flow for the assembly of a 1:1 automobile.

Well, in the case of cars, obviously no one plant, or even a series of plants, can possibly manufacture all the various bits and pieces needed to make a car... glass, rubber tires, steel or aluminum body panels, electronics, wiring, air bags, upholstery, etc., etc. There is so much that goes into a car, the various components would have to come from many sources.

But a model kit consists of far fewer components... some plastic pieces, an instruction sheet, decals and a box. The fact that it takes operations on three separate continents to put together a model kit is kind of.. uh... hard to believe!

[Dr. Cranky]

Interesting, but not surprising, and I wonder if the whole intent is to save the manufactures money, why the kits are going up in prices on a fairly steady clip.

[Rob Hall]

But a model kit consists of far fewer components... some plastic pieces, an instruction sheet, decals and a box. The fact that it takes operations on three separate continents to put together a model kit is kind of.. uh... hard to believe!

Same w/ models, on a smaller scale..

Each type of content in a kit involves different manufacturing processes---the styrene parts depend on molding tools that are in some physical plant somewhere (and RoG kits tend to have those in Europe), the decals are printed by a decal printing specialist, the instructions by another source, the box by a box vendor w/ specialized printing...the nature of the global supply chain results in those functions often being in different geolocations..

[crazyjim]

Prices increases are all because of oil, hence petroleum. What takes those parts from Poland to the boats? Probably trucks. What picks up those parts in the USA and takes to them Revell? Trucks. And what takes the completed kits to the stores? Once again, trucks. We all know the price of fuel continues to rise and somebody has to pay the bill. We do.

So instead of voting for Dr. Cranky for president, vote for me and we'll take over the oil producing nations one way or another. All the oil from Alaska will stay here andd not be shipped to Japan. MAybe if I'm elected we'll do a deal with all the model car manufacturers and give them a government subsidy to lower their prices - but maybe raise taxes. NO - No tax increases. I'll jusy abolish all foreign aid and keep the money in the USA. I might be willing to help out Canada, but they'll have to do something about the cold air blowing south first.

And with that, it's time to make dinner - meat loaf, mashed potatoes, green beans, salad, and then a dip in the 90 degree pool. Darn. Life is tough.

[Rob Hall]

And with that, it's time to make dinner - meat loaf, mashed potatoes, green beans, salad, and then a dip in the 90 degree pool. Darn. Life is tough.

Nice..my pool is only about 75 degrees now...should be able to get in later in May, though, as the triple digit temps approach.

[MikeMc]

Prices increases are all because of oil, hence petroleum. What takes those parts from Poland to the boats? Probably trucks. What picks up those parts in the USA and takes to them Revell? Trucks. And what takes the completed kits to the stores? Once again, trucks. We all know the price of fuel continues to rise and somebody has to pay the bill. We do.

And with that, it's time to make dinner - meat loaf, mashed potatoes, green beans, salad, and then a dip in the 90 degree pool. Darn. Life is tough.

Well my screened in pool hasn't hit 80 yet and I'm south of you......you must have a solar heater on....turn it off and the pool will cool down.

[Erik Smith]

Car makers, and other complicated, multi-part items, used to be constructed entirely by a single operation - or close to it. The manufacturers used to be integrated vertically from the extraction of raw materials to the finished product. Ford even tried to get rubber plantations established in the Amazon. But slowly, the corporations figured it was cheaper to "thin" their responsibilities and find people who could make steel or processors or whatever cheaper and have the parts assembled someplace else. So, somebody who could produce something cheap would get that contract. Some place that could assemble something cheap got those contracts.

It's good for some, not so for others, and we'll not know for years what it means to all of us.

Edited April 28, 2011 by Coyotehybrids

[whale392]

At the rate that our dollar continues to lose value, we will be the ones to once again manufacture the kits as we will be the cheapest labor force on the face of the planet. Then again, we won't be able to afford to buy our own goods, as the prices of those goods will be out of our reach (Hmm...if America does again control the manufacturing of many goods, we CAN control the supply of the items in question. Maybe it is time to tell our little Tree-hugging buddies to shove off and use our own oil as well. These events could turn us around and build our economy back up to prosperous levels.).

[charlie8575]

At the rate that our dollar continues to lose value, we will be the ones to once again manufacture the kits as we will be the cheapest labor force on the face of the planet. Then again, we won't be able to afford to buy our own goods, as the prices of those goods will be out of our reach (Hmm...if America does again control the manufacturing of many goods, we CAN control the supply of the items in question. Maybe it is time to tell our little Tree-hugging buddies to shove off and use our own oil as well. These events could turn us around and build our economy back up to prosperous levels.).

Some very legitimate concerns have been expressed here, and they're something that can't be ignored.

The explanation regarding tariffs is a reasonable one, and something that I could see as being the motivation for what on the surface is some rather odd business decisions.

The whole discussion on globalization is a fascinating topic.

Here's a rather neat article on the matter. My link

Searching "globalization" at The Freeman also gives some interesting perspective.

Charlie Larkin

[ratnasty]

Remember what they are selling ....a model so they have to put it together too LOL. They could package as some preassembly DONE lol

Chuck

Edited April 28, 2011 by ratnasty

[Jim Gibbons]

I first noticed this same thing when Monogram released the Mercedes Benz 300SLR #722 in the early '90s. It was a Revell AG kit originally, with the parts molded in Poland. I guess after the end of the USSR and its "Warsaw Pact" nations, labor rates were favorable to do this. I don't have the kit handy to see where the box and instructions were printed, but this has been going on for a while.

[Richwood7]

OK... let me start by saying I am not some sort if "industry insider"... I don't have any inside information or knowledge of how model manufacturers operate, or why, but I saw something today that got me wondering...

 

I picked up this kit at Hobby Lobby today:

 

 

When I opened it, I was surprised at how well it was packed... all the trees were bagged, all the bags were taped securely shut. But what really surprised me was the small paper tags inside each plastic bag that actually identified the contents of each bag ("Bag white engine, wheels, chassis," "Bag white body, interior." "Bag tires," etc.) A little bit of overkill, but whatever.

 

However, what really surprised me the most was that each tag also said "Made in Poland."

 

I didn't know that Revell had production in Poland, so I was curious, and I looked at the box.

 

"Plastic parts molded in Poland."

 

"Printed in China."

 

"Packaged in USA."

 

 

Is that really the most economical way to do it? Parts made in Poland, box printed in China, and then everything shipped here so it can be "packaged" in the USA??? Seems like a very convoluted way to make a model kit, but like I said, I don't have any inside info...

Even more surprising is the number of things made in China that are almost impossible to buy in China!  I am an American living in Nanning.  There are NO hobby shops at all here.  If I want a model kit made in China I can order it from South Korea (International shipping is free) or buy it in the USA and have it shipped here.  Paint is another thing as it is hard to ship due to its flammability.  What is an enormous hobby in the rest of the world is a pain here in China.  Dragon and Trumpeter models are more easily bought through South Korea, even though they are made in China. .

[Art Anderson]

The whole tariff thing is a big part of the equation:  Even here in the US, back when the old Interstate Commerce Commission administered (regulated) freight rates (we are talking up to about the middle 1970's, the shipping rate that had to be charged (no more, no less!) depended on the classification of the goods being shipped by truck or train interstate!  Believe it or not, I've signed delivery tickets that plainly stated that those cartons of plastic model kits were indeed "unassembled wooden toys"!  All because that was a lower regulated shipping charge than "plastic toys" (apparently the ICC hadn't heard that there was such a thing as an unassembled plastic model.

The same thing is true of import tariff schedules:  For a thousand different items, there can be a thousand different tariffs to be paid at the point of entry--unassembled items come in at a lower rate.  In addition, the cartons of "bagged plastic shots" can be more densely (read that more product in the same size cartons) packed for bulk shipping, which serves to reduce the cubic feet (or meters) of space needed in a seagoing/rail riding seaborne container.  This does two things:  It reduces the shipping weight of each kit by the weight of what would be each individual cardboard kit box (send say, 24,000 model car kits, think of the sheer weight of all those model kit boxes alone!) in addition to saving on the weight of 2,000 standard corrugated 12-kit shipping cartons.  That's a lot of weight right there.  Now, multiply that by all the hundreds of seagoing steel containers and you are talking about many thousand tons of just tare weight alone, and I haven't even mentioned the tying up of available space on that massive container ship.  Add to this potential savings the lower import tariffs on unfinished goods (in this case, unfinished model car kits, and it does add up to a significant savings to the likes of say, Revell.

I'd be quite certain that cost to a model company (if they have a US model kit final assembly line) is far less than the money saved by having those overseas-mfr'd plastic kit parts trees and all the other bits and ;pieces that are part of a model kit assembled on at least a semi-automated asssembly line here in the US.

Art

[AzTom]

In addition to what Art just explained, Revell may be in a Foreign-Trade Zone.  There is one here in Goodyear AZ and the duty free benefits are incredible for manufactures.