- He despised globalization, as if it were a new form of communism spreading around the world.
- He described the large companies who were outsourcing to China and closing U.S. plants as un-American.
- He berated the government for not stepping in to protect U.S. manufacturers from floating currencies and unfair trade.
- He bemoaned the fact that his larger customers had not allowed any price increases and, in fact, were asking for contractual discounts for future work.
- From 19.4 to 14.2 million employees
- From 366,000 to 340,000 companies
- From 22 percent to 12 percent of GDP
According to the U.S. Department of Commerce, manufacturers with fewer than 500 employees make up over 98 percent of the 344,188 manufacturers and provide more than 65 percent of all manufacturing employment. These SMMs are the companies who have been hurt the most in the decline.
Nimet Industries is a job shop in South Bend, Ind., that is doing very well. Part of their sales strategy is a conscious effort to not sell a large percentage of their capacity to any one customer. They say, “If it looks like a job will take too much of our capacity, we won’t quote it as competitively as some companies might. Anything above 20 percent of total sales we really scrutinize to try and make sure it makes sense for us.” This is a very progressive strategy because most job shops depend on 2 or 3 customers for the majority of their business and rise and fall with these customers
Haas Automation started out with four primary machine tool products. They have expanded the line into 80 different models to appeal to hundreds of applications and markets in a wide range of industries. Haas is now the number one manufacturer of machine tools in the world in terms of unit volume
After the EDM machine market collapsed, Charmilles Technologies of Lincolnshire, Ill., knew it had to come up with creative ways to generate sales. They doubled the size of their field service force to be able to call on every known customer. They increased sales volume $3 million in the first year.
By using good market research techniques, studying competitors, and focusing on customer needs, Michael LaRocco of Pittsburgh, Pa., has developed new products with tremendous competitive advantage. U.S. Liners is the fastest growing manufacturer in Pittsburgh and he has created four successful new products in three years.
After the last recession, DTI of Hillsboro, Ore., decided they could not compete on cost alone. They decided to compete on value and quick deliveries. They invested in many new machine tools and brought in outside processes like nickel plating, laser cutting, heat-treating to vertically integrate their plant. The strategy has worked and they have doubled in size since 2002.
John McFarland of Baldor Electric Motors suggests you study your customers and provide the best value. “Don’t try to compete on price because it is not a sustainable advantage. If you live by price you will die by price. This strategy has worked very well and they manufacture all of their products in the U.S. and sell to 70 countries
If we don’t solve the workforce education and training problem for the new manufacturing workers, we will certainly lose American manufacturing. Instead of blaming the education system or the workers, Siemens Energy and Automation has taken the bull by the horns and provides all the education needed in their plants. They address education deficiencies with remedial classes in math, science and English. They provide all types of skill training, and they are the rare company that still offers apprentice training.
Sexton Can Company of Martinsburg, W.Va., has been very successful in developing specialized products for niche markets where they could gain a competitive advantage and maintain profitability. Sexton Can’s primary competitive advantage is that they can manufacture a huge range of sizes, in small lots, and meet accelerated delivery requirements. They can’t compete with the low cost countries for the cheap high volume orders, but have been ingenious in designing their own proprietary hydraulic presses and processes and can produce very high quality steel containers at very competitive prices.
Ricardo Semler of Semco Inc. wanted to push authority down to the workers and make his organization quick and flexible. He realized there was no way to achieve empowerment in a centralized, functional organization. He wanted fewer levels of management and faster response in decision making. He carefully evaluated any department or function that did not bring value to the customer. He felt the overhead departments were too bureaucratic, too expensive and diverted attention from the company’s real objectives