Manufacturers Making ItBy Andrew J. Birol, President, Birol Growth Consulting, Inc.
Almost daily, I hear a manufacturing leader lament the condition of his industry and fret about how Chinese competitors, health care costs, and unfair trade barriers are devastating his business. The discussion typically evolves into how America will decline without a strong manufacturing base and how not every young person can make a living flipping hamburgers or programming computers.
While our manufacturing base is declining, I wish factory owners would understand a few things:
- Some manufacturers are thriving in most every industry.
- Those who are succeeding do so by avoiding or beating foreign imports. They:
- Compete in niche markets.
- Provide very fast delivery.
- Find customers who will pay for value.
When I bring this up to manufacturers, I am often told, “Andy, you don't understand manufacturing.” Here is what I do understand: I work with clients in steel, rubber, coatings, and other such industries who are not only surviving but are growing their businesses. How? They are:
- Driving down their manufacturing costs before a domestic competitor, a demanding customer, or a foreign interloper makes them.
- Defining a narrow manufacturing strategy and refining it through dedicated production methods and runs. They set unwavering standards of quality, cost, delivery, and service.
- Jointly setting, agreeing on, and meeting clear expectations with their distributors and customers. When they make mistakes, they catch them, inform their customers, and repair any damage caused to customers.
- Discarding their predecessors' practices of focusing only on their factory and of selling by calling customers to ask for work only when they were “light.”
- Acquiring skills in the following “non-manufacturing” functions:
- Sales and sales forecasting.
- Product management.
- Direct, trade show, and telemarketing.
- Distribution and territory management.
- Database management of customer, cost, and competitor information.
- Buying their weaker competitors’ customers, technologies, and key people in response to understanding their Best and Highest Use® and applying it to help their customers resolve pain or seek opportunities.
- Refusing to complain, engage in self-pity, or live in denial.
Yes, it is a rough time for most manufacturers, but leaders of growing firms do not rely on their historical success to rationalize their current challenges. Whether America's manufacturing declines or recovers, demand for products is not falling. Becoming a survivor instead of a casualty begins with accepting that the world is changing and deciding to change with it. I sincerely hope many of those who are complaining accept this. I will miss them if they don't.
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© Copyrighted by Andrew J. Birol, President of Birol Growth Consulting, who helps owners grow their businesses by growing their Best and Highest Use ®. Andy can be reached at (412) 973-2080, by email at email@example.com, or on the web at www.andybirol.com.