White Paper
Is there a fire at your door? Yes, and it’s not the kind of inferno that your local fire company can put out. Unless you know how to fight it, the heat generated from today’s manufacturing business climate can destroy your ability to succeed and move forward. The flames of competition, particularly foreign competition, are lapping at everyone’s bottom line.
But, how can you put out this fire? Manufacturers typically focus on the bottom line through initiatives like Lean. However, rising costs and foreign competition have stretched the bottom line as low as it can go. Manufacturers now need to concentrate on top line growth. Competing solely on price is not a viable option.
The first step to making the shift from bottom to top line orientation requires another essential change. Manufacturers need to see themselves in a more strategic light, not just as manufacturers. On the surface, this may seem like an easy transition, but a strategic focus may be new to some manufacturers. Still others have been stung by shallow, poorly implemented marketing strategies in the past. So, the transition to a strategic culture can encounter many hurdles from the very start. The evolution process must begin with executive or senior management buy-in. These top-level individuals need to be committed to solving the problems confronting their businesses through a long-term focus on the fundamentals of strategic planning.
Strategic planning has become essential to the manufacturing sector due to hyper-competition, communication overload and a changing marketplace, most notably globalization. The increase in the mobility of goods, services, labor, technology and capital throughout the world allows for competition from all over the globe.
Manufacturers today need to differentiate themselves from this competition. Even job shops can find points of difference between themselves and their competition.
Differentiation is one important tool that can reap tremendous rewards. Manufacturers can gain control of the bigger picture by establishing a long-term strategic planning culture throughout the organization. This is not a sprint, but a well-orchestrated, long-term marathon approach to success.
A comprehensive strategic plan is based on an objective look at your position in the
market place.
The list of areas to scrutinize when preparing the strategic plan is long, but remember, this is a marathon, not a sprint.
Manufacturers must have a total understanding of the cost of products offered and determine which of those products are truly profitable. A strategic planning culture will help manufacturers recognize when to bring a new product to market, when to retire that product and the pricing that provides the highest margins. This establishes a link between innovation, R & D, productivity and manufacturing.
The old ideology of churning the same range of products or services year after year will be replaced with a differentiation strategy, the idea of creating and building customer-centered products or services. This innovation is not solely for new products, but is relevant to processes that yield higher productivity, lower costs and greater efficiency.
Pfaltzgraff, the venerable potter that went back generations, is now only a brand name as all manufacturing has been outsourced by new owners Lifetime Brands. Other manufacturers have taken a hybrid approach where the company continues to manufacture some products while other products are outsourced.
Organizations need to be great at implementing once the strategy is developed. How many strategic plans have you seen gathering dust on an office shelf? Many times strong implementation is based on having a way to measure the value of strategies. Quantification is a key element to maintaining the organization’s focus on the strategic marathon.
Manufacturers need to become proactive, not reactive. Developing a communication strategy targeting your audience from a vast array of channels is the next step. Again, research is key. Research sheds light on what your audience needs to hear and how they need to hear it.
Manufacturers must realize the importance of strategic planning that provides a consistent marketing presence rather than a super-charged, here today gone tomorrow campaign. The tortoise and the hare fable provides a semi-accurate statement- “slow and steady wins the race.” However the word “slow” is replaced with “measured”. Manufacturers obviously cannot be “slow” to react to changes in today’s market.
Manufacturers can succeed in this new world economy. A manufacturer that uses the marathon approach to its marketing will maintain visibility while building credibility each and every step of the way. In the end, a marathon takes you farther than a sprint.
Copyright © 2006 Barry Group, Inc.
