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.

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.

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.

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.

Training Pays Off For Manufacturer

aj — Wed, 13 Aug 2008 21:58:08 GMT

"Business growth isn't random."

That's one of my favorite quotes, from manufacturing pundit overall bad cat-daddy Doug Hall. He was quoted this past March addressing a group of manufacturers in Rockford, Illinois - considered by many the cradle of the machine tool business in the U.S.

I was reminded of that quote when I read "Manufacturer Finds Certification Pays Off" from the Olympian. This story documents the investment in training personnel made by Wisconsin-based manufacturer Federal Tool & Engineering. So, what's the story in that?

Federal won work worth $1.5-million (US) directly due to its commitment to training.

What clinched the recent deal ... was that the customer could have confidence that Federal Tool has at least six employees certified by the American Welding Society to aptly weld a variety of materials of various thicknesses. "Anybody can buy the equipment," says Federal's owner. "We're willing to invest in the people and develop the training."

And what really caught my eye was where Federal is based.

Wisconsin.

It's a familiar theme for manufacturing SMBs in the U.S. Wisconsin just seems to "get it" in regards to growing and protecting its manufacturing base - at least, more than most other states.

"In many ways, Wisconsin is the leading state," Leo Reddy, chief executive officer of the Virginia-based Manufacturing Skills Standards Council, said before a recognition ceremony last month at Federal Tool. Reddy cited Gov. Jim Doyle's commitment to have 40 percent of Wisconsin's manufacturing work force complete at least one component of the certification by 2016. Thanks in part to state grants to technical colleges and workforce development boards, Wisconsin also has one of the best systems for assessing worker skills and providing standardized training, Reddy said.

But one thing that Wisconsin has in common with many other states is something not to be so proud of:

None of the four employees receiving their certificates for manufacturing skills training had received any such schooling before they began factory work. All agreed that what they learned is essential knowledge for manufacturing workers now.

As with most states, "essential training" isn't readily available. What a shame. Add to that the fact that the Federal employees who were certified represented the training they received as high-end in important categories - process/production, puality, computers, communications, math and science, to name a few.

Hmmmmm. Maybe training your people can pay off.

Go figure.

HAT TIP: Kid Rock

Why Don't You Blog?

aj — Fri, 25 Jul 2008 20:11:37 GMT

I found an interesting blog post this morning about the Common Excuses Companies Use For Not Having a Blog. It presents 4 of the most commonly heard excuses and some arguments in favor of companies blogging to their customer base.

The author, David Wallace, had discovered results from a survey conducted by Burson-Marsteller that found less than 15% of Fortune 500 companies communicate with customers via blogs.

The excuses David has heard from companies?

We Cannot Afford To Install a Blog
We Have Nothing To Say
We Have No One To Write For Us
We Are Afraid!

Both the survey and David conclude that there should be more. They're right.

And the survey found that the smaller the company, the less likely it is to blog. From the survey analysis:

Larger companies tend to control blogs in greater numbers than their smaller counterparts, according to the Burson study. Nearly one-third (32%) of the Fortune 50 maintain blogs, while 16% of the Fortune 201 through 250 have blogs. Only 2% of the Fortune 451 to 500 maintain blogs.

And here's what I know - in manufacturing, it's much worse. I'd venture to say that among manufacturing SMBs, you're about as likely to find a blog as oil for 19 Euros a barrel.

Blogs can be a brilliant channel for inspiration, to influence a company's strategies and products by drawing insight from its customers and prospects. But manufacturers don't see it, and I think there is one main reason why:

Manufacturers Aren't Communicators - It's not that manufacturers have nothing to say, it's that you're not often very good at saying it. It's just not how you're wired. It's the rarest of breeds that has great writing chops and strong programming, machining, or engineering skills. It's nothing to be ashamed of - it's just as unlikely that a marketing executive can program and run a Hardinge.

The answer? Practice. Writing a blog doesn't have to be long-winded - it can be brief. It doesn't have to be written to every day - just regularly. It should portray your organization as competent and allow for your prospects and customers to talk back to you.

All members of MFGx get a blog. It's free. Try it. Get your hands dirty. Have a little fun.

Who knows? This whole Internet thing just might take off.

Military Portal Serves Up Important Web Lessons For Manufacturers

aj — Fri, 18 Jul 2008 18:39:49 GMT

The National Center for Defense Manufacturing and Machining (NCDMM) is a technology provider to the U.S. military and its contractor and supplier base. Its list of Alliance (technology) Partners and Board of Directors reads like a who's who of the machining universe - technology providers, academia and corporate leadership.

To get a strong flavor of the types of support the NCDMM offers the U.S. military supply chain, check out their Manufacturing Solutions page and select from the menu titled "Our Success Stories."

Now, certainly the NCDMM offers great value through driving efficiencies into the intricate manufacturing and machining processes required to build such sophisticated products. Rifling through those Solutions will give you a strong sense of what they've done and how they've done it. And they're actually much more effective at explaining what NCDMM does than the tired prose you find throughout the primary pages of the site. For example:

Over a very short period of time, NCDMM activities evolved from quick response support to participation in a full range of initiatives to resolve production issues that challenge the manufacturing and machining efforts of defense organizations and their contractor communities. This participation addresses currently deployed weapon systems as well as future systems. The impact of the Center's participation is quantifiable and significant.

Ugh.

Now, check out this one example from their repository of Solutions (in PDF format, unfortunately):

Now which of these best portray for you the NCDMM's competence as a potential partner?

(If you said the text, please contact me through this site with the name of your doctor. You obviously get better drugs than Elvis.)

The project sheet does several things that your Web site should do in spades:

Create Brief Vignettes of Your Competence - The PDF is brief. It's easy to read. It states the challenge and the solution and explains how it was done.
What Was The Payoff? - Show directly how your professional competence resulted in real benefits to a past customer through manufacturing excellence.
What Were The Time Benefits? - Time is important to your prospects. Maybe you improved the cycle time of a part or product. But maybe it was improved delivery time. Maybe it was better logistics. Whatever you did to get parts to a customer quicker and cheaper - list it.
Who Was Involved? - What partners did you use? What divisions or groups in your shop or plant or company? Show your versatility.
Put These Examples Front and Center on Your SIte - With apologies to NCDMM, don't bury your vignettes like they have. Make them the centerpiece of your site - you're talking to people that are looking for competent partners, not loquacious wordsmiths.

And another benefit of following this advice: the search engines LOVE this stuff, because you're naturally adding the keywords and phrases that your prospects are actually searching for.

Look, people don't go to the Web to read - they go to the Web to work. To be specific, the folks that you should care most about - prospects looking for manufacturers to make them look good - are.

The NCDMM - a great organization - got their Web site backwards. Push the words to the back, and what you do that makes you great to the front.

Survey Points To Expanding Service Roles For Manufacturing In U.S.

aj — Mon, 14 Jul 2008 18:49:15 GMT

In a recent survey from Deloitte, U.S. manufacturing executives say they consider North America "the most desirable region for expansion over the next three years."

But before you go out and start pulling out the champagne, you should know - there's a catch.

First, the good news: the confluence of recent financial events is absolutely influencing U.S. businesses and where they choose to expand.

In terms of the executives' agendas for expansion, the survey found that sales and services topped the list with 76 percent planning to expand sales in the United States, 58 percent in Canada and 67 percent in Mexico. Sourcing of raw materials and parts (50 percent in China, 49 percent in the United States, and 43 percent in Mexico) and production (44 percent in the United States, 37 percent in Mexico and 37 percent in China) rounded out the top three priorities.

Overall, the vast majority of respondents said North America will not lose competitive ground in those areas over the next five years. And a significant number said they believe North America will become even more competitive by 2012 in sales and marketing (45 percent), information technology (41 percent), customer service (37 percent), R&D/engineering (36 percent) and finance/accounting (34 percent). A small percentage predicted that North America will be less competitive globally in these areas by 2012, with the balance being neutral.

And good news it is, because these are mostly high paying jobs that require intellectual competence but less direct manufacturing domain expertise.

And that brings us to the less than pleasant news, especially for those closest to the shop floor:

The only dark spot is production capability. Despite plans to expand in North America in the short term, survey respondents painted a gloomy picture of this region's ability to compete over the long run with lower-cost locations for production, especially Asia.

More than half of survey respondents (61 percent) said they expect North America to become even less competitive globally as a site for production by 2012. The key barriers to making production competitive globally were seen as labor cost (cited by 71 percent), tax policy (66 percent), work rules (66 percent), lack of availability of skilled labor (51 percent) and costs of raw materials and energy (56 percent). Not surprisingly, these were the issues most frequently cited by executives surveyed as areas that governments should address as matters of public policy.

Clearly, U.S. manufacturing management intends to continue outsourcing production to low cost countries. But while some companies may test those same regions to host their operations, most seem to be shifting toward North America for those ops - and that's not entirely a bad thing. According to Craig Griffi of Deloitte:

"The simplistic way to view manufacturing is to look only
where production is located. It's clear that a more accurate way to measure
the economic impact of these companies is to look at where all operations
are located, including sourcing, research and development, distribution,
finance, marketing, and all of the other functions necessary for a company
to thrive. In most cases, executives are telling us that North America
provides a competitive business environment for most of these activities."

Coopetition - Good For Manufacturers?

aj — Mon, 07 Jul 2008 16:10:22 GMT

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?

Hope: A Global Independence Day

aj — Thu, 03 Jul 2008 14:39:43 GMT

Tomorrow in the U.S. we'll be celebrating our country's independence from England. Every country has their national holiday to celebrate itself. July 4th is when we eat too much and blow stuff up.

Hey, we're Americans. It's what we do.

But this year is different. There are many chickens coming home to roost that aren't just affecting my country directly - our world is seeing fundamental change, and it's awfully troubling these days to play the tape through to its end.

It's pretty clear to me that most everything that ails our world these days boils down to energy - where it comes from, who uses it, and its byproducts are challenging us all economically, politically and morally.

Sure, economies get screwed around and nature always comes around to remind us that she's in charge. But to me, our most serious challenge that we can do something about is energy and how it's used.

In the most recent Time magazine (U.S. version), in an article titled "10 Things You Can Like About $4 Gas," the number 1 thing to like is "Globalized Jobs Return Home".

The world suddenly seems big again. A family of four can't fly cross-country for much less than $2,000. The cost of shipping a standard 40-ft. (12 m) container of couches from Shanghai to New Jersey has tripled since 2000. Trucking carrots from Mexico to Georgia makes less and less economic sense.

In more industries, such as steel, lawn-mower batteries and upscale furniture, doing business in the U.S. is starting to look slightly more feasible.

All true, and it's a trend you'll see gaining steam in the coming months and years. But I fear that manufacturing in general - and the U.S. specifically - will fall back into a familiar reaction to this. Whenever a threat has turned out to be less deadly than was first believed - the threat to the U.S. manufacturing base from other manufacturing sources (Japan), the threat of outsourcing (1980's) - manufacturers heaved a sigh of relief and got complacent again until the next threat came along (China). Then everyone acted surprised, like it never happened before.

Maybe that's human nature. But in the case of energy, we have an opportunity now to do something bold even if the pain of outsourcing begins to ease from work pulling back to less expensive locations, logistically speaking. We all need to come together toward an initiative to wean ourselves now from traditional, less renewable, fossil fuels and high carbon footprints. We need to adopt alternative energy sources, and we all know it. But we can't.

Cause we don't have the huevos.

This morning, I came across an op-ed piece in the latest Industry Week that represents my thoughts, and I'm pretty sure it will resonate strongly with you. In "More Than Just Earth-Friendly, Going "Green" a Route To Jobs and Prosperity, John Madigan points to a logical solution and how to get there:

Manufacturing ... actually creates both wealth and jobs. Developing "green" manufacturing technology also offers opportunities to become a net exporter of environmentally friendly products and processes. "Green" manufacturing, and the technology to support it, can create the required $20-per-hour jobs to sustain a strong middle class while helping to solve air, energy, water, and food crises.

Create a government-sponsored program, similar to the "Apollo Program," to create jobs based on solving environmental needs. Such a program, focused on self-sustaining and renewable solar, wind, water turbine, clean hydrogen energy and desalination of the ocean's water, could jump-start a revival of U.S. manufacturing.

Incent companies, by tax policy, which make environmentally friendly and sustainable end products here.

Create prizes to reward innovation for environmental friendly products manufactured here.

Utilize existing tax supported agencies such as NIST manufacturing centers to: Define and teach best practices to manufacturers through shared network of knowledge resources; Benchmark on the successes -- Toyota, Wiremold, Danaher Corp. and employ proven lean executives on oversight boards; Challenge "economy of scale" thinking and standard cost accounting for more market-based accounting systems; Focus on small businesses or start-up companies and nurture "incubator green manufacturing zones";

I do not agree with some of Mr. Madigan's points in the article (his take on productivity, for example) but I wholeheartedly agree with it in spirit.

We need a bold initiative, similar to the U.S. Apollo or Russia's Luna programs, that will stimulate our collective creativity and find real solutions while creating wealth.

According to NASA, there have been over 1500 "spinoff" technologies from the Apollo lunar program to benefit business, health and wealth. We need that now, but on a global scale. The problem is too large, too complex and affects too many of us politically to tackle it in a vacuum.

I hope that we can find the resolve to address this as one people - for all of us, including manufacturing.

Happy Independence Day to all of you, no matter where you are.

Are Multinationals Really That Bad?

aj — Tue, 01 Jul 2008 19:29:58 GMT

In the New York Times this past Sunday, I found a book review that struck me as a balanced take on the true role of large companies in the global economy. The review is of a book that strikes me as a balanced take on the true role of large companies in the global economy.

That's right, I'm recommending a book I've yet to read. Get over it - I ordered it from Amazon already.

The article, "The American Multinational, Unbowed, reviews the book titled "Globality: Competing with Everyone from Everywhere for Everything.

What sold me on the book?

While the consensus is that U.S. (and, I believe, any) multinationals are under serious threat from foreign competitors like Tata or Cemex, the facts are that these behemoths are much more competent and capable than their size or age suggest. The book - via the article - is said to point to 5 core strengths that are often overlooked:

Human Capital - While most of what we hear is that China and India are creating more engineers and technologists than the U.S., those countries face challenges of extremely high turnover rates, language barriers (most are not fluent in English - only marginally competent), most require further training beyond university, and many indigenous companies can't offer career paths that attract and keep talent.

International Agility - Conglomerates and multinationals are actually more agile and adept in foreign markets than they're given credit for.

Mergers & Acquisitions - Western companies have the capital and experience to consistently expand themselves or eliminate competition - much more so than their international competitors.

Technology Innovation - Again, more capital and experience at functioning openly with other cultures give multinationals the edge.

Brand Strength - Coke. Google. American Express. Enough said.

The authors sure son't seem to be poo-pooing the emerging challenges from other markets and countries. U.S. manufacturers - especially the large ones - have bureaucracies and administrative layers that can certainly block progress. And these emerging markets are growing at incredible rates of scale.

But many conglomerates have overcome these impediments by learning to do business in the very countries that are seen as challengers. For example, the authors point out that General Motors was the number 1 in China car sales in 2007, and it is beating Toyota in other markets (Brazil, India and Russia).

We don't hear much about that in the mainstream media. That's why I'm looking for good things from this book.

How Will YOU Seize On The Latest Opportunities?

aj — Mon, 30 Jun 2008 14:11:24 GMT

Today's MFGx guest blogger is Anita Berlanga, CEO of Bear Boring LLC, a custom machining shop in Wyoming, Illinois.

"What does not kill you makes you stronger," to paraphrase an oldie.

For small-to-midsize machine shops, the current economic recession - coupled with shocking fuel charges - will either kill us, or we will prevail and possibly even grow.

The media would have us cowering in our shops, scared to buy a paperclip, let alone explore inventive ways to maintain our customer base as well as grow during these difficult economic times but I posit that these are actually times of OPPORTUNITY for small-to-midsize machining and manufacturing businesses.

One example: As few as 5 years ago it looked as if we were on the ropes due to offshore sourcing. The current cost of fuel (coupled with other offshore difficulties) is allowing companies to reconsider shops that are more geographically desirable. How do we present ourselves to buyers to maximize this potential? What are the opportunities therein for the small jobshop or midsize manufacturer?

I don't have all the answers or I'd be in Tahiti, sipping a pina colada ... so I'm putting it to you, cyber-colleagues: what are YOUR plans to weather the current (and developing) conditions ... and maximize opportunity during these difficult times. Let's share some ideas:

One of our solutions is to provide our customers with value-added services. The big guys are sweating so you can imagine what your smaller customers are going through. Chat with your customers, find out what their concerns are, then see what you can do to address those concerns.

For example, we have a customer about 2 hours away with several processes to end-use. When we first teamed up with him we found he was sourcing casting 4 hours away from him (6 hrs from us), machining with us, powdercoating with yet another shop ... and these are relatively large parts ... if you look at this, it's easy to see that it rapidly becomes cost-ineffective for him to do business all over the tri-state area - shipping alone was eating him alive and that was before gas spiked over $4/gal!!! Our solution was to work with our local foundry and powdercoater to supply him with quotes for casting, etc. within our local area (a 20 mile radius). Now, instead of hundreds of dollars in shipping charges all over the place he has one shipping charge - back to him. In helping him keep his costs down we are hoping to help him stay in business, in general and with us!

One of my favorite phrases is: SOLVE THE PROBLEM. Most companies can get a machine shop - we're all over the place. It's harder to find a partner- one who can help the customer solve the problem. People tend to stick with their partners. In these perilous economic times, what tactics are you using to partner with your customers and help them solve their problems?

I thought it would be interesting to hear from some of you on this. We don't need particulars - just some ideas you might have for making it easier for small shops to take advantage of this economic downturn.

And that's another thing ... how do we help each other solve the problem? We can all survive this if we work together. Another example (I'm full of 'em): I just had an interesting chat with my painter - he's a tiny shop and often he's the only one there. He just had surgery on a badly damaged hand. Wrangling heavy beams is out of the question for a while. We had 2000+ lbs of frames that had to be powdercoated NOW and I suggested that I send one of our guys to help him lift the beams and he said 'well, it's my problem'. Bull - it's OUR problem. If the parts aren't done my customer will bite ME, not him. So it behooved me to get somebody over there to give him a hand. We met our deadline, the customer loves us and we solved the problem!

These economic times will cause us to react in one of two ways - we can hunker down and hang on tight to what we know, or we can explore other avenues of thinking how to do business. Do you collaborate with other machine shops that, perhaps, have a client base where processes can - and need to be- shared? If not, consider it. There is actually more business to be had with collaboration than exclusion, even amongst 'like' shops. Consider putting together an ad-hoc consortium. We have scored several HUGE jobs that way (you can have your attorney draw up a limited non-compete and you sign one, too! Works both ways). The lead shop is responsible for quality control and liaises with the customer - no cheating!!! One job we closed in the past month kept the doors open for 3 different shops, including our own. If our colleagues reciprocate, that's great. But if not, we're still all making money we wouldn't have made on our own.

This may sound all Pollyanna and everything, but consider this: the companies that are coming back onshore have been doing business with giant offshore shops with cheap labor. Even if that is changing, it's still their current benchmark so we have to be creative to give them a translatable value (it's unlikely we are going to be able to match their labor rates!). Communication, customer service and collaboration and problem-solving are all qualities that will help quantify your value and make your shop a viable contender.

And don't listen to the media - we will can prevail and grow during these times. But only if we work smart...and possibly work together.

Let's hear your thoughts on this!

Yes, Your Web Site Can Get You More Business

aj — Fri, 27 Jun 2008 20:29:22 GMT

No one that I know of has done more over the years to help define what a Web site should say than Jakob Nielsen of www.useit.com.

He is direct, knowledgeable, and almost always right. His message for Web site language and content has been consistent, and extraordinarily useful for manufacturers.

The latest post on the subject comes from his Alertbox newsletter. Writing Style for Print vs. Web follows Jakob's mantra that prospects are in a different condition when they visit your Web site, compared to when they encounter a brochure or other printed media.

I've always described the distinction like this:

Printed media introduces prospects to things they didn't know they needed. The Web introduces prospects to things they already know they need, but aren't sure where to find them.

For anyone interested in maximizing their manufacturing Web site, you'd do well to read through Jakob's legacy work at UseIt.com. Here are some other related pieces on his site that can help you improve your site's effectiveness at gaining new work and prospects: