Apparently for SMB manufacturers, there is safety - and bucks - in numbers. But how scalable and long-term this strategy becomes may all depend on the motive and how it's accomplished.
To fight the battle against low-cost manufacturing countries and shifting sources for discrete parts, materials and services, manufacturers everywhere are forming alliances and groups to provide tight geographic solutions clusters for buyers.
Forget for a moment - if that's possible - about the sense this makes with fuel and shipping costs where they are, or even about which country or region is the best candidate for coopetition.
Profit can play just as strong a role as survival to motivate previous competitors to cooperate.
For a perfect example of how coalitions of manufacturers are forming to reinvent the notion of competition and services in manufacturing (without a low-cost threat involved), check out Wikinomics: How Mass Collaboration Changes Everything (see the story of Chongqing and its formidable motorcycle designing and building network in China, beginning on page 219).
The Chongqing network is a free-forming, loosely based organism of drifting designers and engineers and machinists and assemblers that somehow work and collaborate as one of the world's most successful (re: profitable) motorcycle building businesses.
In the U.S., several regions and states have seen SMB manufacturers form coalitions to forego competitive relationships to survive.
No state has seen more setbacks than Michigan, and it has produced two examples of a more structured approach to coopetition:
- Defense Contract Coordination Center (DC3) - This entity was created to connect military purchasing bodies with qualified Michigan-based manufacturers that match their needs.
- United Tooling Coalition - This consortium of manufacturers have banded together to provide a one-stop, regionally tight destination for several services - dies, molds, machining, prototyping, design, fixtures, engineering, and more.
So, here's the rub. One approach is abstract, and allows for interaction and collaboration with little traditional structure. The other is linear, in that while it changes the channels through which work enters the companies it allows them to operate fundamentally the same.
Which model has the best chance to survive? One? Both? A combination?
I want to know more?