Much is being and will continue to be written as to how companies should survive the recession. I need to add my own brief comments to this topic.
1. Focus on margins, not market share or gross revenue. Too many companies will take any job no matter the profitability (if any). If you do this, and unless you are sitting on a huge cash reserve, you will end up spending your way out of business just to perform those jobs. A focus on financial health, now more than ever, is critical, and underperforming lines of business are not worth maintaining. Rationalize products and parts and drop what is not worth carrying. What good is market share if the business goes under?
2. Get as close to your customers are possible. This has been trumpeted many times as a response to globalization, but it's just as important in this recession. Analyze the principles of mass customization and see if there are any you can adopt - even if the whole paradigm is not a match for your business.
3. Grasp competitive advantage. The recession will end at some point. Be prepared to leverage every bit of competitive advantage you have now and for the future. Use this time to exploit your value chain (Porter's tool for analysis of competitive advantage) for every bit of competitive advantage you can find. Build a strategic plan (see Align/Excel, www.AlignExcel.com) based on competitive advantage and focus on internal capabilities.
High-variety manufacturing presents a set of unique challenges for a company, whether a mass customizer, job shop, build-to-order, high-mix low-volume, or other type. These manufacturers must approach manufacturing throughput, lean, product management, sales, order processing and other functions differently than a mass producer. In this blog I hope to bring to light some of the unique issues and discuss ideas as to how to become more competitive, productive, and profitable.
Valent Group Inc. - Essential Strategies for High-Variety Manufacturing
Copyright, 2007-08, Valent Group Inc.
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2 comments:
As you point out, survival is about performing the right actions. The same can be applied to marketing. 1. understand your costs and market what makes sense right now 2. uncover the current interests and needs of your customers and join in on a conversation they're already having to market to them effectively and 3. start planning and implementing initiatives that will put you at the forefront of buyers' minds as they start to consider their needs for the coming year.
Your points are valid. This is as old as the sun, but one way many manufacturing plants are saving money is buy buying used machinery. I've worked along side many plants who've been in a position to take on additional work but lacked the machinery to do so. Buying used made a major difference for these folks.
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