Are you a small manufacturer with limited Web resources or knowledge? Are you a shop with a product line? Do you want to test the e-commerce waters but not sure how or where to start?
Take a look at Web Store by Amazon.
For $59.99 (U.S.) per month + 7% commission, you get an easy to set-up, fully functional online sales channel. That includes credit card processing, fraud protection, and search engine optimization. And - maybe best of all - you don't have to mess with maintenance or support of the server: Amazon handles it all.
And, if you add Amazon products to your products, you can earn "referral fees" from Amazon to offset your costs.
Not a bad deal.
Sure, you can use eBay. That's a fine way to go. But if you want to enable your own Web site with this functionality without the time and effort, give Amazon a shout.
MFGx Blog : April 2008
Previous Next
A recent article from The Small Business Times in Wisconsin titled "The Boomerang Effect" (by Eric Decker, who did a fantastic job) is significant to small and mid sized manufacturers in mature markets for 2 reasons:
- It shows conclusively that machining and manufacturing work can be - and is being - won back from China.
- It points out 5 lessons that you can use to compete - and win - globally.
To effectively compete, many Wisconsin manufacturers have transformed their operating models using the principles of lean manufacturing, automation, quality assurance and control, just-in-time delivery, innovation and technology, said Mike Klosinski, executive director of the Wisconsin Manufacturing Extension Partnership (WMEP), a private, nonprofit organization dedicated to the growth and success of Wisconsin manufacturers.
"Many Wisconsin manufacturers have not sat still (in recent) years," Klosinski said. "Putting in place lean (principles) has been the biggest strategy. And by taking on more services around their product, understanding their customers' customers and being more innovative and creative about developing new products, they've turned into value suppliers. As a result, those companies' large customers are electing to source with someone they can trust instead of sourcing overseas."
The stories and roadmaps presented by the 4 companies in the article aren't new. You've seen and heard them trumpeted on MFGx, in publications, at conferences, and from other sources. Some of you have embraced these tenets. But many of us have whined or wrung their hands, blaming cost and the government and the invisible hand.
Look at what successful U.S. manufacturers have done to grow in these uncertain times, and be inspired. (Highlights are mine.)
Signicast Corp., a manufacturer of investment castings, has invested heavily in automation, robotics and cutting-edge technology at its Hartford (WI) headquarters, where its main manufacturing operations reside.
The company's investment has paid off. In the last three years, Signicast has seen significant work increases, said Robert Schuemann, executive vice president. And much of that work is coming back from China.
"We are definitely feeling the boomerang effect," Schuemann said. "The playing field is changing. Many of the rebates given to Chinese manufacturers have been taken away. The yuan (the Chinese dollar) has gone up, and labor costs have gone up there. You're seeing the people that went there for price coming back for quality, delivery and price."
Signicast has grown its revenues every year since 2001, Schuemann said. The company had $130 million in revenues in 2007 and forecasts about $140 million for 2008.
... Signicast's use of automation and ... four different (cellular) manufacturing modules enable the company to respond quickly to new orders and to requests for changes. That speed and flexibility give Signicast a significant edge over foreign competitors.
Lesson 1: Invest in technology
Like Signicast, Plastic Components Inc., a manufacturer of injection molded plastic components based in Germantown, competes directly with the Chinese and other emerging markets. The company produces components that are used in a wide variety of manufactured products and has customers around the globe.Lesson 2: Automate
"We can go head-to-head with any molder in the universe with our universe," said Thomas Duffey, president of Plastic Components. "When we started the company in 1989, the concept was a fully automated plant. The idea was to take human involvement out, and taking cost and variability out."
Also, like Signicast, Plastic Components relies heavily on automation and technology to keep its parts price down.
"Our tag line is, 'Low Cost at Home,'" Duffey said. "We try to tell people to change their mindset, that they don't have to go to the Third World to buy parts at competitive prices. They can get them in Germantown, Wis."
Lesson 3: Get the word out (market to customers and prospects)
Barton Precision Components is a precision machining shop. The components it makes are machined from rolled steel and aluminum, destined for the hydraulic, oil drilling, pump and value, aerospace, medical and munitions industries. Barton Precision Components also holds several contracts with the U.S. Department of Defense.
(It) is competing and winning against Chinese manufacturers with both automation and by making components that have higher tolerances than Chinese competitors can produce.
"We're talking about tolerance on a hole that is .0002 of an inch," said Valerie Hron, president of the company. "That's like one-tenth of a piece of hair."
"We had a large OEM (customer) with a volatile schedule that makes hydraulic components," she said. "Before, if they called on Jan. 1 and said they needed 30,000 pieces, it would take five months to complete the run at 80 hours a week. Now we can do the same 30,000 pieces in 10 days with eight people instead of 14."
Barton's enhanced capabilities have won it jobs that previously would have gone to China and other emerging markets, (Raymond) Batista said.
"We had a big customer that didn't get a delivery on time (from China)," he said. "We were able to take it to our machines that could make their parts in 10 to 12 days. More and more situations like that are coming up.
Customers in the U.S. are getting tired of the situation. And we're promoting our product that way."
Lesson 4: Move up the food (supply) chain to provide better quality and value
Instead of trying to compete on price, Reich Tool & Design Inc., a tool-and-die manufacturer based in Menomonee Falls, is working to develop niche manufacturing capabilities in aerospace, medical and energy exploration - areas it believes that Chinese manufacturers cannot compete.
Reich Tool & Design is pursuing AS 9100 and ISO 13455 certifications to make components for the aerospace industry and medical fields, certifications that foreign manufacturers will find difficult to obtain, Fritz Reich (president) said.
About 70 percent of Reich Tool & Design's business is in automotive, appliance and consumer products, Fritz Reich said. The other 30 percent is in aerospace, medical and energy products.
Reich Tool & Design already has built components for the International Space Station, and its medical components focus could add significant sales to the company, Brett Reich (vice president) said.
"The medical work has the potential to double the sales of the company," he said.
Lesson 5: Move into other markets to ward off competition and diversify
A dear friend of mine - and one of the smartest people I've known - once said to me, "There are no bad business conditions to a good businessman."
Here are 4 examples that prove he was right.
Here in Georgia (that's the U.S. state, not the Eurasian country), there's an extraordinarily talented group of students, faculty and alumni at Georgia Tech University (GT) that should warm the collective hearts of manufacturers everywhere.
They're the Robojackets, dawg.
They're the future, they're going global, and they want you to know about it.
The Robojackets (a play on the name of GT's mascot, the Yellowjackets) are a collective that:
"... aims to enhance the understanding of the field of robotics and its applications in depth of knowledge as well as to increase of the number of students exposed to it. We plan to carry out our mission through projects that correspond to the organization's tenets of promotion, education and advancement."
They participate in robotics-focused competitions all over the U.S. - including BattleBots events. This summer, they'll be competing in the 2008 RoboCup World Event in Suzhou, China.
These are talented, motivated, passionate manufacturers. They are translating goals and requirements into tangible results through technology, intuition and creativity. And they have to be resourceful to pull all this off, without a lot of resources.
If you worry about the future of manufacturing - the lack of qualified talent, the diminishing manufacturing capability coming from our schools and our culture these days - then pay the Robojackets a visit. Give them some encouragement. Maybe offer them some support.
I'm not sure how they'll fair in the upcoming competitions - there are quite a few in the coming months. But I have a pretty good idea what you'll call a Robojacket after graduation:
"Sir."
NOTE: Do you know of other remarkable groups that will shape the future of manufacturing or are just downright inspiring? Drop me a line and let me know: aj at mfgx dot com.
This past month, Abilene Christian University (ACU) in Texas announced that this fall it would become the first university in the U.S. to provide an Apple ****** or iPod touch to every arriving freshman.
According to the press release (link above):
"... freshmen will use an ****** or iPod touch to receive homework alerts, answer in-class surveys and quizzes, get directions to their professors' offices, and check their meal and account balances - among more than 15 other useful web applications already developed, said ACU Chief Information Officer Kevin Roberts."
The ACU Web site also offers a film called "Connected" that portrays the student experience, post-mobility.
Now, this isn't exactly new. There are other instances where Apple or colleges have provided iPods to incoming students, but this represents a coordinated effort.
"We are not merely providing cutting-edge technology tools to our incoming students," said Roberts. "We are also providing the web applications that ensure these tools will become critical to the students' learning experience. Because 93 percent of ACU students bring their own computers with them to college, we are choosing to take them to the next level by providing converged mobile devices."
Think about the conditioning and expectations these young people are developing in terms of how they access information. Imagine these tools all over the world, in the hands of engineers and manufacturers and sourcing professionals. And imagine its impact on every node of the supply chain.
These will be your employees and customers of tomorrow. They are bringing a new level of demand for information.
How well will you - or do you - provide it?
It's hardly a new concept - reducing a population or market or workforce or demographic to an easier-to-digest number. We've seen it in school, in business and our personal lives - complex collections simplified to measure results and conditions.
Miniature Earth isn't new, either. Born from a text published in 1990 by Donella Meadows, it is a "presentation" with a simple but powerful message:
Reduce the population of the Earth to a community of 100 people to understand our differences, our shared experiences, our challenges, and our place in it.
The economy. Shifting manufacturing bases. Contracting customer bases. Change.
The cost of everything, and the value of nothing.
Too often, we get wrapped up in our own condition. We take things for granted and don't count our blessings. We lose sight of where we are, the opportunities and the possibilities.
Stop what you're doing. Right now. Take a moment to watch the Miniature Earth presentation here.
Be hopeful. Enjoy your weekend, and your life.
There's talk - serious talk - around circles in China that the government is considering shutting down manufacturing in the areas of Beijing, Shanghai and Tianjin (and possibly a broader area) from July through September of this year to "clean up" for the Olympic Games.
Over at All Roads Lead To China, Richard Brubaker broke the story of internal discussions taking place to enact these plans. So far, word is that the shutdown would be wide-spread, but only affect high-polluting manufacturing concerns.
My sources in China tell us that there has been discussion of such a plan, but that it is part of a larger, more systemic plan to "green up" China in the wake of recent governmental restructuring. The sources say that they've yet to hear any direct references to the Olympics as motivations for the rumored shut-downs.
Not only would such moves have cataclysmic impact on spend and sourcing businesses with a strong supply chain presence in China (see Jason Busch's Spend Matters for more on that) - suppliers in mature markets like the US and Europe can use this information to engage buyers, prospects and customers to gain new work or begin fresh dialogue.
If nothing else, if this action comes to pass it will leave little doubt about Beijing's resolve to move China to a higher-functioning manufacturing posture.
And besides, imagine the PR fallout of photos from the Olympics of brown skies and athletes vomiting halfway through the 400-meter hurdles ...
Rest assured, we'll keep up with this important issue and pass along any info to you.
