MFGx Blog

The Role of the Internet in Developing Your Business

aj — Tue, 25 Nov 2008 10:25:44 GMT

The Web has become the preferred channel where manufacturers, prospects and purchasers go to research sources and partners to build and develop their products. But many manufacturers miss opportunities for new business because they're presenting incomplete or insufficient information online.

Prospective customers use the Internet to research potential solutions. They have specific purposes, and they collect information on plastics processors that can provide those solutions based on their specific, technical specifications and business needs.

Today's prospect is a stealth prospect: in control and anonymous throughout the research cycle until they chose to reveal themselves. Their online behaviors aren’t very different from yours when researching a capital equipment purchase. What they find online about your company – or don’t find there – can strongly influence who they'll engage or investigate further, and who they won't. If you’re deemed worthy, they’ll engage you.

To attract, influence and motivate prospects to add you to their short lists of potential suppliers or partners, an online strategy to maximize exposure AND effectively capitalize on prospects’ behaviors must include:

Present Your Core Strengths – Your equipment and facilities are important. So are the industries and companies you’ve served. But the primary purpose to any successful Web presence for plastics processors is to differentiate you from your competition. And there’s nothing that differentiates you like describing the details of projects you’ve worked and parts/products you’ve made. Present the technical features of each part, the materials and equipment used, the improvements made to the part/product during the life of the project, and any problems encountered and how you solved them.
Start A Blog – They’re inexpensive (many are free), they’re relatively easy to set up and you don’t have to know code to update them. And best of all, a Blog (short for “Web Log”) is an effective means of communicating what your company is doing, what projects you’re working on, company news and anything the market may find interesting. Easy, inexpensive and effective. And here’s a tip: post to your Blog regularly, but you don’t have to post frequently.
Participate On The Web – Find related forums for plastics professionals – like those on Plastics.com – and answer questions, offer suggestions and contribute to the dialogue. Each post acts as an organic reference for you and your company. And remember that once the discussion has faded into the background, your posts will remain in perpetuity – legacy posts are often found by prospects searching for suppliers, and these “breadcrumbs” can be very effective at putting your company in a prospect’s view.

Modern Sourcing 101

aj — Thu, 20 Nov 2008 15:27:33 GMT

The impact of the Internet on sourcing cannot be overstated.

Complex Request for Proposal (RFP) and Request for Quote (RFQ) processes that months to complete only 15 years ago have compressed to a matter of days. Today, supplier discovery, engagement, vetting, and management begin – with few exceptions – online. Search engines, supplier Web sites, online directories, association sites, online marketplaces and other Web-based resources all add up to a collection of tools that give small and medium sized manufacturers (SMMs) the power to create, manage and grow supply chains and alternatives that equal those of much larger companies.

The primary differentiating factors that define higher functioning (and more profitable) manufacturers often are directly related to the quality of their stable of suppliers, as well as the spend and demand management of the chains in which they contribute. Properly managing global supply and demand chains require constant diligence and scrutiny; not only must procurement professionals and engineers manage existing suppliers – they must ensure that contingency suppliers are available when needed to minimize supply disruptions.

Many SMMs that supply product have adopted these sourcing methods to find suitable, dependable plastics processors and suppliers to outsource to when faced with limited capacity, demanding schedules or processes outside their core competence.

Regardless of a company’s sourcing needs or roles, a strategy is crucial since the process of assessment, engagement and replenishment is continuous. A sound sourcing strategy must:

Define the personas of the ideal supplier(s) for each project – including (but not limited to) process/product competence, pricing requirements, geographic limits, schedule/demand conformance, total cost of ownership, certifications, industry
compliance/experience, and acceptable deviations from defined requirements.
Specify lists/data for maintaining primary and contingency suppliers for each process, including performance, costs and quality. These lists/data should also regularly monitor suppliers’ fiscal health, technical proficiency and stability to anticipate and avoid supply chain disruption.
Anticipate scenarios that could require the rapid reorganization of supply chain structures – civil/economic disruptions in source countries, poor/unacceptable supplier performance, and natural disasters – and define contingency plans to maintain supply channels.
Assemble acceptable sources for building up-to-date lists of known sources for current or anticipated products.

What do you see as required points for a valuable sourcing strategy? Anything you'd add or question?

Collaborate - And More - With Zapproved

aj — Sat, 20 Sep 2008 20:37:54 GMT

Here's an interesting online collaboration tool that can help manufacturing SMBs, workgroups and displaced teams come to consensus around elements of a project.

Zapproved allows anyone - at no cost - to submit a proposal or proposed project/product to any person or group with an email address. Of course, attachments can be added to any proposal. The proposal package can then be sent within the email with two buttons - one to approve, one to deny. All votes, their sources and any comments from the group are tracked and shared, allowing for strong record keeping and approval cycle management.

Since Zapproved is a SaaS (software as a service, and Web-based), there's no software to install. And your projects and proposals - along with all data around the approval cycle - are maintained and retrievable for later review.

This simple tool can help technical groups build consensus, keep projects moving, and it brings transparency to all team members involved in a decision process.

It's not too hard to imagine how Zapproved can assist manufacturers manage their supply chains by gaining documented approval and consensus on design or process changes, as well.

A unique approach to collaboration, Zapproved is worth a visit if your team could use a little control.

Union To Further Raise Costs To Manufacture In China

aj — Mon, 15 Sep 2008 15:47:13 GMT

The opportunities that the rising costs to manufacture in China offer manufacturers in mature markets like Europe and the U.S. are real. The low valuation of the dollar, eliminated VAT rebates, and rising labor and fuel costs all are motivating enterprises to look at other countries - many closer to their base - to supply their products.

We'll say it again - this is a perfect time to engage former customers or new prospects to sell the attractiveness and adorability of your business as a viable alternative to China sources. As they explore new options to manage these rising costs, they're more likely to listen to options they wouldn't have thought about 2 years ago.

But it looks like things are getting even more "perfecter."

This past week, a story by David Barboza in the New York Times announced "China Tells Businesses to Unionize." The ramifications for businesses currently embedded in China may be even more dramatic than the rising costs of the past year and a half.

The gist of the article is that the Chinese government is strongly pressuring corporations in China - both foreign owned and domestic - to allow the state-approved unions in their businesses. Some of the largest companies like Wal-Mart and others have until September 30th to accept the union. Mr. Barboza writes:

Lawyers and analysts say that demands of the All China Federation of Trade Unions, the only union the Communist Party allows, could sharply alter business practices of foreign companies in China, including giving lower-level workers the power to bargain over anything from pay raises to whether a Chinese headquarters should be moved elsewhere in the country.
+ "This will dramatically change the landscape here," said Andreas Lauffs, a lawyer at Baker & McKenzie's Shanghai office who is an authority on China's labor laws. "At the very least, company management must now consult, and in many cases bargain, with employees and unions on a wide range of matters, whereas in the past they enjoyed almost unlimited autonomy."+
+ The union push is coming at a time when global corporations are already facing rising labor and commodity costs in China, which is struggling to contain inflation.+

Of course, there are definately direct costs to be concerned with as the union moves into an organization:

Forming unions could be costly, lawyers and labor experts say, because a union could fight for higher wages and benefits and because companies are required to pay 2 percent payroll dues. The dues could amount to millions of dollars in additional costs for big companies. Yum Brands, for instance, has about 160,000 employees in China.
Manufacturers are already coping with soaring labor costs, which have jumped by 30 to 40 percent in some coastal manufacturing zones over the last four years. Also, a new contract labor law and stricter enforcement of older labor rules means some companies can no longer avoid paying overtime costs, which can be substantial because many factories insist that some employees work six days a week.

And in case you think this only impacts the big boys:

Union officials say they are focusing on global companies, but Chinese companies make up the bulk of the manufacturing work force and they are also expected to face audits and pressure to unionize.

But the concern - from Fortune 500 corporations to SMB manufacturers with a Chinese manufacturing presence - should be over the intangibles that come with collective bargaining and a strong union: work stoppages, and leveraging for better pay, benefits and conditions. In other words, it's not the bill on the table, but what comes for desert.

"Some foreign companies in China haven't behaved well in dealing with their workers' interests and rights," Wang Ying, an official at the All China Federation of Trade Unions in Beijing, said in a telephone interview this week. "As the economy and society develops, China needs to improve workers' legal rights and interests, which is a demand of a civilized society."

China's resolve should not be questioned here. Its aggressive approach to reducing pollution and redirecting resources prior to the Olympics should offer all the proof you need. And the natural progression to a modern society has to include an emerging, powerful middle class that wields influence and power. Look at the U.S. 100 years ago for more proof of that.

The costs of progress are always significant. China and its people are beginning to discover its potential and invest to make it reality. But the insertion of the union into Chinese manufacturing will absolutely increase costs and the need to improve margins much more quickly.

Manufacturing Malaise in Britain, Europe

aj — Thu, 11 Sep 2008 20:40:32 GMT

It has been reported that Britain's GDP and its manufacturing output each dropped 0.02% in July. It's the 5th consecutive month of economic contraction, and a 6th month - which would official signal recession - is expected.

Also, the EU expects Germany and Spain to enter into economic recession this year (no numbers for their manufacturing output reported).

Frankly, I'm surprised that with the high costs of fuel and shipping, decimation of each country's base manufacturing demographic, and crises in the housing and financial markets (yeah, they're dealing with that, too) that they all hadn't entered into recessions already.

A Toolmaker's - And Man's - Life, Well Lived

aj — Tue, 09 Sep 2008 09:36:25 GMT

I did not know Jack Schron Sr. nearly as well as he made me feel like I did.

Jack was the patriarch of the Schron family that founded Jergens, Inc., of Cleveland, Ohio - a venerable tooling manufacturer with a long history and rich heritage. I had the great pleasure earlier in my career to work with the Schrons when they founded ToolingU in 2002.

I found out that Jack passed away the other day, and I found myself more touched by it than I would have expected. I haven't seen him for 2 years, and had only known him a little longer than that. But there were many things about him that affected me, and I expect if you know (or are) a toolmaker these qualities may resonate with you as I reflect on what I knew of the man.

Every single time that I saw him, he made me feel like the only person in the room - whether it was in his office at Jergens or in a cavernous hall at IMTS. I watched him do this with everyone he met. He was graceful in a way that only a life spent solving problems and finding solutions can make someone. His eyes were clear and sparkled, and his personality positively shined with confidence - but not arrogance. His humor was genuine and never forced, at least while I was around him. He commanded respect, but at the same time you just couldn't help but want to have a beer with the guy.

But what really set this man's life apart for me is his legacy. His offspring - running the business he founded - are solid, honest, studious and dependable. They are respectful of their community, altruistic and generous. Their company encourages a family and team atmosphere. They are creative and resourceful. And they give a ****.

Like farmers, most toolmakers develop an easiness that mastering the natural world brings. Jack passed these qualities onto his son, Jack, and his grandson, Chad. It's something that can't be faked.

I imagine Jack Schron, Sr., this week, like when I last saw him, in his 90's and riding the aisles of IMTS, greeting everyone with a smile and surveying the tools and technology with curiosity and eyes sparkling.

Just like a true toolmaker.

Will The Real Boeing Please Stand Up?

aj — Mon, 08 Sep 2008 15:07:27 GMT

OK, so we didn't pile on the Boeing vs. Northrop Grumman/EADS KC-X airborne tanker contract fiasco over the past few months. Sure, we covered it plenty (see here and here), but since the brouhaha over the awarding of the contract to - oh, horror - NG/EADS (a foreign company!) we've taken a wait-and-see tack. After all, everyone else seems to be asserting opinions, so why add to the excessive bloggage, right?

But now, Boeing is 3 days into a strike by The International Machinists and Aerospace Worker, which means they have no indigenous machinists to build their aircraft and parts. In the days leading up to the strike, Boeing had offered an 11% increase in wages, as well as improved bonus, pension and healthcare concessions. But that isn't what sent the machinists to the picket lines.

It was Boeing's intention to increase outsourcing of it's manufacturing overseas to improve its bottom line. The machinist's union wasn't having anymore of that, and they walked.

Wait a minute - just a few months ago, the Web was overrun with cyber-hooey from pundits and politicians, nearly all screaming bloody murder that the U.S. government was shooting itself (and citizenry) in the collective foot by giving work to NG/EADS. As the line went, that work would be best given to a U.S. company that would ensure U.S. workers - and the tax base - would get the benefits.

So isn't this a gross contradiction? Will Boeing getting the KC-X tanker contract be "good" because Boeing will use U.S. workers (as said a few months ago), or is Boeing planning on outsourcing like crazy (like, say, " ... 70 percent of all of the parts for its 787 aircraft ..."). Is Boeing American or unAmerican? Will they outsource or not outsource?

The fact is, if Boeing wants to outsource everything Katmandu to improve profits and efficiency they should be allowed to do it. And if the machinists want to challenge that, they should strike. This is democratic, like it or not.

But Boeing's portrayal as a patriotic protectionist on the one hand, and an outsourcing addict on the other is disingenuous and flat-out ridiculous.They can't be both at once, and only when it suits them.

It seems to me that between the tanker deal and the machinist strike, Boeing's in one heck of a PR pickle. It'll be interesting to see which Boeing emerges in the next few months.

Another Energy Alternative

aj — Thu, 04 Sep 2008 18:54:42 GMT

The dialogue around alternative and renewable energy has reached a fever pitch, and that's nothin' but good. The airwaves around the world are rife with groups and individuals espousing their own plans (and often their own agendas) to remove the burden of fossil/foreign fuels from their countries and the world.

In the U.S., the natural gas industry is pushing - shockingly! - natural gas. The oil companies are advocating - surprise! - increased indigenous drilling for oil. Some, like T. Boone Pickens, actually seem 100% genuine.

So, I was surprised to stumble on a unique approach that's original, practical from someone without a dog in the fight.

J.C. Bell is the founder and CEO of Bell Bio-Energy, Inc. Mr. Bell, with a background in engineering and agriculture, has developed and patented a process that converts just about any biomass - any living thing, like a plant - into hydrocarbons that can in turn be converted to crude oil.

It's alledged that Mr. Bell first got the idea after observing cows - ahem - pass methane. Thinking of the process that took place in the cows stomach to convert food to gas inspired him to pursue his biomass project.

Before you laugh, know that Bell Bio-Energy is slated to open 7 initial plants at U.S. military instillations this month - all inconjunction with the U.S. Department of Defense.

Bell's plan is to use data collected from the DOD phase of this project to refine the full-scale process. Once that process is defined, he thinks it could produce up to 500,000 barrels of oil per day within the first 18 months. He also predicts that full-blown production would reach 5-million barrels per day in 3-4 years.

Still laughing?

Of course, the perfect solution isn't to produce more crude. If the pollution side of the equation isn't in the mix, we still have serious issues to deal with. But biomass is biomass - Bell's process converts any biological materials into crude. That includes plants, lawn clippings, human waste, and several kinds of refuse.

Personally, I like Picken's Plan. But when you add this as a bridge (along with natural gas) to fruition, it seems like an obvious alternative.

Your MFG.com Profile, The Web, And Your Prospects

aj — Tue, 02 Sep 2008 09:07:12 GMT

Recently over at MFG.com, a buyer in the manufacturing marketplace sent an interesting piece of feedback that all manufacturers should consider sage advice. The buyer - a prospect that uses MFG.com supplier profiles to conduct research to select suppliers - provided a list of "must haves" for their MFG.com profiles. He writes:

"... It would really behoove (you) to work very close with these new suppliers to make sure that the profile entered is as complete and detailed of as possible. I would think with the money that suppliers spend to participate in this fantastic program it would make them wise to the extreme benefits of having a detailed and complete profile. It should be (your) number one goal ... to help these suppliers develop there profiles."

The buyer's list shows what he looks for when comparing suppliers and choosing to initiate contact. It is based on deficiencies he's found with several profiles in the past:

Pictures of their shop, both inside and outside (if they are proud and it is presentable, common sense would apply).
Pictures of parts previously made that show their full capabilities.
Detailed equipment lists of everything in their shop, all the way down to overhead cranes and forklifts.
Links to their company’s website (if they have one, which they should invest in anyway).
Any ISO 9001 or other certifications they may have from distinguished buyers.
References from buyer

Not only does this list describe in detail what an active buying prospect looks for in an MFG.com profile, it also rings true for your own Web site. Your Web presence - all mentions of your company online - serve one primary purpose: to differentiate you from your competition. Thoroughness, accuracy and relevance are key to influencing these potential customers and partners that you are worth the time to investigate further.

If your MFG.com profile is incomplete, update it. If your Web site is incomplete, update it. If you don't, you're likely leaving money on the table and you won't even know it.

China VAT Rebates Raised - But Not By Much

aj — Thu, 28 Aug 2008 20:02:10 GMT

The Chinese government has raised the value added tax (VAT) rebates given to manufacturers of some textiles and garments. It's been reported (see here and here) that the rise is meant to ease cost pressures on China's textile producers slapped with rising costs. The move is minimal (from 11% to 13%) and isn't seen as a trend to reverse the drastic rebate cuts of the past year.

The rebates for some products, including zinc, silver and batteries (seen as highly polluting), were scrapped entirely.

The 2% increase for textiles is half of the 4% requested by China's textile and garment manufacturers.

My sources on the ground in Shanghai confirm that the recent rebates have been met with little attention, compared with the sweeping cuts of last year that that sent shock waves throughout all global manufacturing supply chains.

Open Source Everything, Indeed

aj — Thu, 28 Aug 2008 18:44:01 GMT

Here at MFGx, we've been living large on Open Source. From post after post in our forums, to a special community assigned to the MFG.com Open Source Machine Tool project, we're big believers in the power of crowdsourcing.

But even our Open Source exuberance is challenged by this:

Wanna build your own Subatomic Super Collider?

That's right - according to this tongue-in-cheek play on the Open Source model, you can build your own Hadron Collider. All you'll need to build it is "... €6-billion, enough real estate to hold your 17-mile-long ring, a staff of international geniuses, and ..." downloadable plans from the Institute of Physics in London.

But wait - is this really Open Source, or is it €6-billion freeware?

Hat tip: Jonah.

Another Online Collaboration Tool For Manufacturers - Clavardon

aj — Mon, 25 Aug 2008 19:07:06 GMT

Clavardon (www.clavardon.com) is an online tool that allows you to invite others to co-browse any Web site with you and chat live with everyone in the process. As you surf a site, others can see what you're looking at, what you're pointing at and any text or item you want to highlight.

According to Clavardon, the utility was created to help e-commerce businesses and sales staffs to demo their sites to prospects. It certainly does that.

But SMB manufacturers can use it to their advantage as well. For example:

Review your own Web site with offsite resources to develop or refine.
Review and collaborate on any item - drawings, plans, or projects - that you've uploaded to the Web beforehand.
Review documentation and information with customers or prospects.

Clavardon is free for up to 100 sessions per month, and requires no setup or registration.

One downside that I noticed is that the chat window is pretty large, which limits the size of the window that displays the site being shared.

But for the convenience and usability, this is a hard utility to beat - especially for the cost.

Hat Tip: Robin Good

China - As Always, It's A Matter Of Perspective

aj — Thu, 21 Aug 2008 14:39:33 GMT

Over at All Roads Lead To China, Richard has hit upon something that many bloggists and press pukes overlook with striking regularity: just because China's fortunes as an outsourcing darling are shifting/slipping/adjusting doesn't mean you can paint everything/one with the same brush.

His post titled Is China No Longer Competitive? breaks down the broad view often presented by the Western press: that Chinese products are only of poor quality; that fluctuating currencies, rising fuel and labor costs signal the end of China's dominance as a manufacturing giant; and that these shifts mean the same things to all companies/business models outsourcing to China.

The fact is, as Richard rightly points out, it's much more complicated than that. A macro view doesn't adequately offer the micro solutions that are called for. He asks that companies assess their positions by answering these 6 questions:

What is your China platform?
Where is your market?
Where are your competitors?
Where are your suppliers?
Is your product high tech, or high labor?
Were you previously compliment (with new Chinese labor laws)?

Boiled down to its most lucid point, Richard's premise is that the complexities of each company's supply chain dictates its vulnerability to fluctuating macro conditions. Reacting to the same conditions in the same ways could spell big trouble for companies that don't plan and navigate their own path through the shifting outsourcing waters.

Manufacturing As Art And Inspiration

aj — Tue, 19 Aug 2008 12:48:32 GMT

The more you try to shave the cat, the more the thing will bite and scratch. I think it's best to leave its fur, and listen to its silky pur. Some people try to make life a little tougher than it is. - Cake

Christopher Conte is the poster child for spreading the manufacturing gospel to the masses. He is to manufacturing hipness what Jerry Lewis is to MD, or what Jerry Lee Lewis is to rock: a potentially timeless, iconic figure that represents a vibe around which an audience can grab inspiration and act.

Christopher Conte is an artist with STRONG manufacturing chops. And he's a bad manufacturing cat daddy with STRONG artistic sensibilities. Born in Europe and migrated to the U.S. as a boy, he found these talents in himself early on and began a brilliant journey that led him to a wonderful place. He creates art, and he builds artificial limbs. The yin and the yang.

You can see the fruits of his "artgineering" pedigree at The Work & Sculpture of Christopher Conte.

It seems to me that Christopher's story and what he does offers something special that we shouldn't overlook. We've tried hard in the past to express that manufacturing in the 21st century is advanced, highly technical, rewarding, satisfying and modern. But we've sucked at it. Sites like Manufacturing Is Cool were launched with the best of intentions. They've tried desperately to convey those positives about manufacturing to a generation that doesn't believe it - and that's noble. But those efforts look tired and hackneyed. They look like your dad wearing a Slipknot t-shirt and telling you to eat your peas because they're good for you. Somehow - while their motives are pure - you just can't take them seriously.

Christopher Conte is what we should use as an example of modern manufacturing mojo and its vast potential. Manufacturing isn't just about making chips or welding anymore. Manufacturing is - because of the vast availability of inexpensive technology and communications channels - a blend of technology, business and expression. It doesn't - and shouldn't - have to carry the old, tired stigma.

You can't make someone see something they don't want to - they have to get it themselves, and on their own terms. The Christopher Contes of this world create a sphere of influence far more powerful than any other message we can come up with on our own. He's the ideal - perfectly expressed, and manifested in real life:

Manufacturing can, indeed, be cool.

MFG.com's Open Source Machine Tool Project Updates

aj — Fri, 15 Aug 2008 19:58:59 GMT

Over at MFG.com, they've completed the build phase for their version of a fully functional, industrial-grade CNC vertical machining center. The machine tool will be used as the initial prototype for presentation to the global machining and manufacturing communities. Recent progress includes:

New videos that document the full project through build completion.
An online description of progress made toward developing the online portalthe machining center's files, plans and drawings will be offered through.
Photographs chronicling the early design and build phase of the MFG.com Open Source machine tool.