Mike Collins in the News

Smaller firms can still compete

By Michael Collins, President, MPC Management

The following is an excerpt from Mike Collins’ book Saving American Manufacturing. He believes there are 10 factors small to midsize manufacturers use to compete in a globalized economy. One is regular contact with customers.

Harry Brown of EBC Industries says, “It is not possible to reverse the tide of ‘globalization.’” Harry is typical of a new breed of industrial manufacturers in the U.S. In sharp contrast to the old “defender organizations” of the past, the new breeds are [small and midsize manufacturers] who are market driven, and who know how to prospect for opportunities.

There are many examples of SMMs who are not only surviving but are flourishing in this era of change. These companies always stand out because they are usually innovative, good at monitoring customers, quick to adapt to the market changes, and more profitable than their competition.

They do not rely on a few customers or a few products. And they eat change for breakfast. Change isn’t a threat; it’s nourishment. These companies are building a portfolio of market niches and a diverse customer base to insulate them from changing demands of customers. They are niche marketers who know how to find new customers and market to those niches on an ongoing basis.

The new stars emerging in this economy are small and midsize manufacturers who are not afraid of foreign competitors and are organized to “turn on a dime” when required. They accept the changes brought on by globalization and are not hoping or waiting to return to the good old days. These new manufacturers are transforming their companies to fit the changes in their markets and differ from the typical SMM in many ways. They are competing — and they are succeeding.

Monitoring customers — it simply means being close enough and having the kind of trust with customers that allows you to know what they like and dislike quick enough to make a change. Remember that your customers are dealing with fast-moving change and globalization, too. Monitoring customers and their challenges helps make your company “part of the solution.”

Monitoring customers requires empathy, interviewing (and listening) skills and visiting customers on their turf. Many type one and two manufacturers (particularly job shops) have never had to do this and they may not even have people who can interview customers. But the hardcore fact is monitoring customer likes and dislikes are the key to survival.

D8 is a small manufacturer of custom-built molds in Potlatch, Idaho.

The tooling and mold industry has been severely hurt by foreign-built, low-price tools and molds. It is no longer possible to compete against foreign mold makers simply on price. Progressive U.S. manufacturers are struggling to find ways to compete.

Barry Ramsay of D8 Inc. is one of the new breed of small manufacturers who understands that the answer for competing in the new economy are found by monitoring customers. Barry makes it a point to visit all of his good customers periodically to discover their problems and needs. He believes it is important to visit customers as if he is on a specific mission with well thought out goals, objectives, and strategies.

Barry says, “I look at these as missions where I visit customers and know my targets, planning my attack differently for each individual or group. I often visit the ‘tooling manager’ who is being beat-up by his boss to get the lowest tool price. I listen very carefully to his message and try to understand his motives, his environment, and his world. If I can I then try to meet with the ‘production manager’ and try to listen to his pressures of meeting production goals, quality requirements, pressure to reduce scrap, use less energy, etc.

“If I am reasonably successful I can get both the tooling purchaser and the tooling user (production) talking about the common enemy — waste. I can then start to ask them strategic questions like: ‘If you could have a mold that cycled parts with 20 percent more throughput, or 20 percent faster (cycle time), would that be of value?’ Hell yes, of course it would! Then I have to prove it (which D8 can).

“Eventually I have to turn that discussion around from ‘the price of the mold’ to ‘the cost of a mold running in their plant.’ If I can do that I can show how D8’s molds are more valuable at the end of the month or the quarter.”