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A Publication of WTVP

In our work with manufacturers throughout Illinois, we’re often asked about competition. Who does IMEC normally bid against? What other firms do what you do? Why would a company not want to work with you?

There are many excellent organizations which help manufacturers to be more productive and globally competitive. Some focus on working with larger OEMs, some on companies in specific industry sectors and others on delivering certain types of assistance, such as training or technology support. The needs among the manufacturing community are so diverse, and the challenges they face so immense, that there is plenty of business to go around. From community colleges to private consultants to university-based small business counselors, Illinois is fortunate to have a vibrant network of business service providers. We consider ourselves partners, not competitors.

The answer to the question about competition may be surprising. More often than not, one theme emerges when a company decides not to act on a business challenge or opportunity—complacency. Too often, business leaders are content to stay the course, whether it’s remaining in one industry sector, serving one vertical customer segment or running the company in a certain way.

Several years ago, when the influx of low-cost foreign imports drove many domestic manufacturers out of business, the cry among manufacturing leadership was loud. It was not unprecedented, however. Similar concerns were voiced when the Japanese made inroads into the U.S. automotive sector in the early ‘80s. Within the past few years, the manufacturing community has accepted the fact that foreign competition is not going away and is likely to get stronger. And maybe it’s making the U.S. sector a little less complacent.

What can a manufacturer do to increase market share in this environment? Cost is obviously an important driver, but as recent concerns with Chinese toy markets indicate, quality is once again becoming a key differentiator in the purchasing decision. Many OEMs are devoting increased resources to managing the external spend with key suppliers to ensure that sourced components are safe, reliable and free of defects. Consumer product manufacturers are seeing increased demand for their domestically made products; the upside—higher price for higher quality.

I remember meeting with a Caterpillar supplier back in the early ‘90s. We were talking about his overdependence on CAT. This was at a time when the community was aggressively working to diversify the local economy and move away from a reliance on heavy manufacturing as a wealth creator. This leader, a very sharp businessman who had built a lucrative business for his family, told me he would “live and die” by his business with Big Yellow. He indicated he simply did not have the desire to pursue business elsewhere. I left that meeting convinced that this supplier would not be around long.

Today, customer service, proximity and impeccable quality have enabled the company to maintain a thriving business with the OEM. They’re even in a few other aligned business sectors now. Lucky? Maybe, a little. But with the right attitude and focus, U.S. manufacturers can overcome complacency, compete and win. IBI

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