Client Snapshot
- Buyer: US pet products company, Costco Kirkland Signature co-packer.
- Product: Injection-molded nylon 6 chew toys (bacon-flavored), 3 sizes.
- Volume: 96,000 units / month, 3 FCL / month steady state.
- Trigger: Costco Supplier Responsibility Code (SRC) audit failure on an existing Vietnam supplier (excessive OT and unlicensed subcontracting).
The Problem
Costco requires SRC re-audit clearance before any new PO. The buyer had 60 days to source a replacement or Costco would reallocate the slot to a competitor's private label.
What TUSKO Did
Days 1–9: Supplier Matching
Filtered our Thai injection molding pool for:
- 500T+ clamping force presses (chew toys need 350–450T)
- Nylon 6 / nylon 66 processing experience
- BSCI or SMETA within 6 months
- Prior US pet retail export (Chewy, PetSmart, Costco)
3 candidates in Chonburi and Rayong shortlisted. Video plant walk-throughs Day 5. On-site audit Day 7–9 on the top 2.
Days 10–12: Costco SRC Pre-Audit
TUSKO's Bangkok compliance team ran a Costco SRC mock audit:
- ✅ Working hours ≤60/week including OT
- ✅ Wage records match time cards for last 3 months
- ✅ No unauthorized subcontracting (all molding & packing on-site)
- ✅ Environmental: wastewater discharge permit valid, no penalty history
- ⚠️ Minor: missing fire drill log — closed with CAPA in 4 days
Costco 3rd-party auditor (SGS) confirmed pass on Day 34.
Days 13–60: Tooling & Sample
- 3 existing molds transferred from Vietnam (buyer-owned) — modified for Thai press specs
- Gold samples approved Day 48
- FDA-equivalent nylon compound (Radici Radilon) — no plasticizers, chew-safe
- Choking hazard test per ASTM F963 passed at Intertek Bangkok
Days 61–132: Ramp & First Shipments
- Ramp: 32K units Month 1, 64K Month 2, 96K Month 3
- 3 FCLs shipped by Day 132 (Laem Chabang → Tacoma, DDP)
- Pre-shipment AQL 1.5 — 0 majors, 3 minors across 192,000 units
Cost Impact
| Vietnam (old) | Thailand (TUSKO) | Δ | |
|---|---|---|---|
| EXW unit | $0.94 | $0.86 | -8.5% |
| Ocean + duty (DDP Tacoma) | $0.31 | $0.09 | -71% (China+1 tariff avoided) |
| Landed / unit | .25 | $0.95 | -24% |
Results
- ✅ Costco SRC cleared on first re-audit
- ✅ Kirkland shelf slot retained
- ✅ 24% landed-cost reduction, unlocking margin for Costco's 15% markup rule
- ✅ Steady 3-FCL/month cadence held for 8 months (and counting)
Frequently Asked Questions
What is Costco's SRC audit and how do Thai factories prepare?
The Supplier Responsibility Code covers labor, health & safety, environment, and business integrity — similar to SMETA but with stricter subcontracting and OT rules. Thai factories typically prepare with a 2-week internal review, a mock audit by a firm like TUSKO or SGS, and 2–4 weeks of CAPA closure before the official Costco-nominated auditor arrives.
Which Thai regions are best for injection-molded pet products?
Chonburi and Rayong (EEC) dominate mid-to-large tonnage injection molding thanks to Toyota/Honda supplier ecosystems. Samut Prakan handles smaller tonnage and consumer goods. For pet toys specifically, Chonburi has the deepest bench of 350–800T presses with food-safe nylon experience.
How does TUSKO handle tooling transfer from another country?
We coordinate mold shipment (typically 3–5 weeks Vietnam → Thailand including customs), inspect on arrival for wear and shot-count, run a T0 sample on the receiving press, and issue a tooling condition report to the buyer before mass production. Mold modifications for press-specific shut-heights and ejector patterns are billed separately at Thai tooling shop rates ($400–
,200 per mold typically).Can Thailand really beat Vietnam on landed cost for the US market?
On EXW, Vietnam is often 5–10% cheaper. But once Section 301 exposure, ocean rate volatility, and audit risk are priced in, Thailand frequently wins landed for US-bound retail programs — especially at Costco/Walmart volumes where audit failures translate directly into lost slots.