Building An American Brand To Build A Manufacturing Business

Reshoring was a big topic among attendees at our annual Smart Manufacturing Summit this Spring in Detroit. And, as we heard from the CEO of Shinola, there’s a lot to like beyond more reliable supply chains for flying the “Made In America” flag for customers. But you have to know how to play it right. Shinola is a manufacturing company that’s nothing if not audacious and ambitious. “We are building a lifestyle brand, more than just a watch company,” said CEO Shannon Washburn. “We’re determined to become the next great American lifestyle brand born in Detroit.”

To that end, the startup that began by making bicycles and assembling watch movements in Detroit has added a Shinola Hotel downtown, a design cooperation with Lincoln for a version of its Aviator SUV, a merchandise collaboration with Crate & Barrel, the possibility of a Shinola toboggan and the prospect of Shinola eyewear by spring of 2023, in a collaboration with Marchon.

Shinola now employs about 450 people making leather goods as well as watches, half of them in Detroit, as founder Tom Kartsotis—who first founded the multibillion-dollar Fossil watch brand—and Washburn continue to build out the notion of what an American manufacturing brand can become.

Here’s how other manufacturers can move toward Shinola-level success:

• Start small. For a year, Shinola’s initial watch-making workforce of about 100 people in Detroit did “nothing but build movements,” Washburn said, a labor-intensive skill that could involve putting together tiny assemblies of up to 120 pieces. Supervised by Swiss watch-making experts, the company’s core manufacturing workforce mastered the most important capability for a watch-making startup.

• Improve the basics. Last year, Shinola introduced single-piece flow manufacturing in Detroit. “We saw efficiencies improve, quality go up, and lead times go down, and overall productivity and happiness within the team got much stronger,” Washburn said.

“It helped us see how we could achieve operational excellence and efficiencies and create really strong teamwork in the manufacturing space,” she added, “It became more about having the right product at the right time for the needs of our [customers] versus the organization of our equipment.”

• Focus on your people. Developing its people has been key for Shinola. “We celebrate our manufacturing team members and give them opportunities,” Washburn said. “They’re developing new skills as we develop new launches; and it’s about education and letting them show their strengths.” Two of Shinola’s original hourly employees have become production managers.

• Launch apprenticeships. Shinola works with its entry-level employees to elevate them within through its Be More program. “From positions in retail, customer service and manufacturing, where do they want to go next?” Washburn said. To help employees figure that out, Shinola holds “passion days” around different areas of the business to help them foresee pathways upward. Four of five people who joined the new apprenticeship program have already been promoted.

• Communicate thoroughly. “I tend to overcommunicate, but I prefer that,” Washburn said. “People can’t do what they don’t understand.” That includes sharing the company’s success with KPIs, she said. “People want to know what they’re working toward, and if they do, the results can be outstanding.”

• Stay in touch with customers. During Covid, while Shinola stores were closed, the brand “stayed close to our guests as associates sent handwritten notes,” Washburn said. “It wasn’t to say, ‘We want to sell you this or that,” but more to check in. ‘How are you doing? How are you feeling? When things open back up, we are here for you.’”

• React to the moment. Shinola is looking to cut expenses by 10 percent this year in light of the muddied picture for the U.S. economy. It is also “focusing on our top 25 basic watch [SKUs] and go deep on those and be in stock, dedicating our manufacturing to those products,” after cutting down from 36 SKUs.

• Stick with your DNA. Hotel, store or via e-commerce, Washburn said, “it all says, ‘Shinola.’ The consistency of what we want to be and what’s important to us has to be a touchpoint. That’s the only way to have authentic interaction” with customers.

And every new brand extension by Shinola “needs to be core to our DNA, which is stylish design, clean and classic. We are listening to our guests in terms of how they’re experiencing the brand differently.”