San Francisco is not a cheap place to locate a business, especially a manufacturing business. It's one of the world's most expensive real estate markets and has some of the highest labor costs in the U.S.
But despite these issues, electronic circuit board manufacturer Tempo has raised $20 million to fund the building of a 42,000 square foot plant in San Francisco.
The reason this makes sense is Tempo's target market.
Tempo is a small batch manufacturer focused on getting quick prototypes to tech firms looking to rapidly iterate on a design.
Their valued added is making it easier and quicker for hardware companies to prototype circuit boards and evaluate them before they begin high volume production.
Tempo claims companies can make prototypes in several days rather than weeks, by cutting out the back-and-forth between customers and manufacturers.
Their location in SF also means shorter transit turn around times compared to more distant locations like China. This is especially true for Bay Area firms.
We first noticed this trend in 2007. Key quote from our article back then on this topic:
Related to this, I've been in several corporate meetings lately where the topic was discussing moving offshore manufacturing back to the US. Driving these discussions are the high cost of air freight relative manufacturing costs. The products involved are electronics that are often changed and updated. This makes using sea shipping too slow.
These companies also need regular and ongoing contact with the manufacturing facility to for testing, QA, etc, which is much easier if the manufacturing facility is local. This combination makes manufacturing locally attractive even though the manufacturing costs are higher than having the work done overseas.
"Speed kills" is a widely used sports term. But it's also become an important part of business strategy.
And the need for speed iscreating new opportunities for small manufacturing companies.
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