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Leatherman's promise to keep it local

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Articles - June 2011
Wednesday, May 18, 2011
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Leatherman's promise to keep it local
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BY RON KNOX

 

0611_Tactics_01
Photo by Katharine Kimball

It’s just after 10 a.m. on a Wednesday, and, if for only a moment, the 90,000-square-foot Leatherman factory, nestled along a winding road in industrial north Portland, is quiet. Of the tool company’s 550-plus employees, those working the early, 4 a.m. shift are nearing the end of their lunch break. Now is the time to stretch.

Up and down the factory’s white and gray concrete walkways, the Leatherman workers stand in semi-circles and bend, crack necks, pull back on hands to help loosen tight wrists.  Some folks hold their arms straight out from their sides and swing them in little circles — the fitness technique de jour of mall walkers the world over.

The stretch breaks are crucial. They are, of course, beneficial for the workers. Necessary, even. But these stretching sessions also help ensure bright eyes and loosened limbs, ready to take part in a manufacturing operation that absolutely must be as efficient and productive and lean as possible.

 

Leatherman
President and CEO: Jake Nichol
Employees: 380
Estimated annual revenue: More than $80 million
Founded: 1983
Scope: 36 products are sold in 85 countries
In a world filled with tool companies making Leatherman-type tools using far less expensive labor, Leatherman stands alone. The company’s production facility is the only remaining manufacturer of foldable, all-in-one multi-tools to build all of those products in the U.S. While its competitors can sell their products on department store racks for 20 bucks, Leatherman tools are often kept in locked cases, with each selling for upwards of $100. The competitive disadvantage is stark.

But Jake Nichol, the president and CEO, has been here before. And he has a plan.

“We have a pretty good idea as to how you can compete with the world from a high-wage area like Portland,” Nichol says.
To remain relevant in an economy where price often trumps quality, the company has implemented a deep and indeed proprietary program aimed at streamlining costs and efficiencies in every aspect of the business — from the sourcing of its parts, to its in-house manufacturing and assembly processes, to when and how it looks outside of its own operation for help. The goal, Nichol says, is a simple one: To compete at the same price point as Leatherman’s competition, all while building their tools just a tick south of the Columbia River.

 



 

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