Philadelphia was once known as “workshop of the world,” but manufacturing has been making a long, slow exit from the region.
Some businesses, however, are finding a way to make things here and make a profit. Others are not sure it’s worth all the effort.
On a recent day at a shop on Sansom Street, four women were leaning over sewing machines, rotating cloth in their hands and engaging motors with foot pedals. The seamstresses were busy with a job that was once a mainstay in Philadelphia—they were making clothes.
“We do everything in house, we have our own pattern makers and sample makers,” said Sarah Van Aken, the owner and designer of the SA VA fashion line, shop and storefront. “Sometimes, we’re doing design and development for clothing that needs to go into our retail store for SA VA.”
Van Aken, who started out manufacturing clothes in Bangladesh, decided to bring nearly every aspect of her business—from materials to labor to sales—back to the Philadelphia region.
In 2008, with help from the Philadelphia Industrial Development Corporation, she opened her storefront. The SA VA clothing line includes an $18 tank top, a $389 blazer and $180 jeans.
Because she doesn’t have to ship materials around the world, Van Aken said she reduces waste.
Business plan for social sustainability
“We’re committed to being the most socially sustainable apparel company in the country,” Van Aken said.
But that’s a tall order, as Van Aken explained
“What that means for us is a consideration of how our garments are made, who they are made by, what they are made with, how they are transported, our relationship with our customers, the end life-cycle of a garment, and our impact on the community and environment,” she said.
SA VA’s vertically integrated business model offers an example of how businesses can bring manufacturing home.
According to economist Ram Mudambi of Temple’s Fox School of Business, however, manufacturing is a low-level activity that is not the way of the future.
In fact, said Mudambi, it may as well stay over seas.
“The important thing is not what products we make here, but what activities do we do here? That’s more important,” he said. “So because we’re never going to do an entire product in one location anymore, those days are gone, like 150 years ago.”
What is important, said Mudambi, is being at the forefront of innovation, and having a greater degree of the intellectual and creative activity happening here.
Innovation and manufacturing
Sometimes, innovation and manufacturing go hand in hand, said Michael Araten, president and CEO of K’NEX Toys in Hatfield, Pa.
“I happen to believe, and we as a company happen to believe, that in order to have a nation that controls its own destiny, you have to be able to make some stuff, Araten said. “In addition to that, if you make things in this country, you are helping to support a domestic economy that certainly now more than ever needs some support, and then you are developing your own customer base.”
K’NEX Toys are part of a family-run business that molds plastic parts of any shape for companies around the country. Made of standardized pieces, like Tinker Toys, K’NEX are meant for small engineers.
“K’NEX I would say is best known for things that move, for our roller coasters, for our Ferris wheels, in fact, when we started. And we still now actually sell a 6-foot diameter Ferris wheel that has over 8,700 parts in it,” Araten said.
The toys at K’NEX are designed in house. The molds for the plastic parts are also designed here. Araten says only five employees work on the factory floor, with a fleet of 100 plus robots, which don’t get tired, take breaks or make mistakes. It’s an innovation that keeps his products cheaper than those made in China, he said.
“If you invest in automation, you take away the people advantage, since the only advantage that overseas really has is the people advantage,” Araten said. “When you take that away, you are globally competitive. As we like to say, on the injecting-molding side of the business, we’re cheaper than China, and our part prices typically are.”
Economist remains dubious
Meanwhile, Mudambi said Pennsylvanians should focus on being the brain-power behind the products of the future and then let international trade figure out where they should be manufactured.
“To sort of say we want to build a wall around Philadelphia and say this is going to be an island and everything here is going to be done locally, and nothing is going to be brought in, or go out of here, it’s at least in my view, highly unlikely we’ll be able to sustain a highly wealthy, prosperous economy,” he said.
As manufacturing in the Philadelphia region continues to decline, it remains the main driver behind Pennsylvania’s economy. This year, it accounted for 23 percent of the state economy.