Survival of the Smartest
by Barry Carbaugh
What do Danny DeVito, Gregory Peck and manufacturing have in common? Quite a lot according to Al Frink, assistant secretary of the US Department of Commerce and President Bush’s manufacturing czar. During a recent meeting with Barry Carbaugh and Sam Miller of Barry Group, Secretary Fink relayed the story of a 1991 movie teaming Danny DeVito as Larry the Liquidator with Gregory Peck, owner of a small, stable, and profitable New England wire-and-cable company. The theme of the story is that Peck’s character continued to operate the company the “way it was always done in the past”. As Larry the Liquidator attacked, this anchor with the past caused the company’s undoing. And so it goes with today’s manufacturing operations. Today’s owners and managers need to embrace new concepts for strategic planning, marketing, and operations in order to preserve the heritage of success from the past.
The 21st century marketplace brings very different challenges than in the past. Global competition, incredible price pressure, and skeptical, fickle and hard to reach consumers are just a few of the problems that have to be dealt with in order to generate the success and path forward that is so necessary to preserving manufacturing in the US. In recent years manufacturers have become bottom line focused. Programs like LEAN have created efficient operations. But Frink stressed that you cannot “save” your way into the future. At some point the focus has to change from the bottom line to the top line.
Just like a stock portfolio, Frink stressed the need for diversification of manufacturer’s product and service offerings. The new products should be aligned in a different area of the economy so the company is not so vulnerable to shifts in their primary sector. For example, if your company is supplying the military arena, find a consumer driven product that is similar to what you are making for the military. Or, if you manufacture a consumer product, develop a business to business product. Better strategic planning and implementation lead to less risk and more stability.
Along those same lines, Frink suggested that there are “riches in niches”. Find a niche in the marketplace that has high demand but lower competition. Finding the right niche in the market can create tremendous success.
All of these factors are very important but the key issue presented by Frink was workforce development. The average age of a manufacturing worker is in the 50s. As these people retire, there are not enough workers to take their place. Part of the cause of this problem is the perception of manufacturing – dirty, greasy, and unpleasant. “The truth is you could operate much of the machinery in today’s manufacturing plant in a suit,” stated Frink. To solve this problem, manufacturing operations and their local communities need to establish a vision of their workforce needs and go about the work of recruiting and training these vital resources so that there is a seamless transition from one generation to another.
“Bullish.” That is the one word that describes Frink’s attitude toward the future of manufacturing. We suggested that his philosophy led to a “survival of the fittest” approach. He hesitated and added, “no, survival of the smartest.”
Getting smart and staying smart is what Barry Group can help you accomplish. We can help you establish a strategic plan and then implement that plan in a way that creates the success, security and survivability that you and future generations of owners and employees need. For more information, please give us a call…
Copyright © 2006 Barry Group, Inc.
