April 28, 2017
There is no doubt that globalization and market fluctuations have profoundly affected the U.S. manufacturing industry, but there are still opportunities that savvy businesses can capitalize on, especially this year.
New business strategies — such as the integration of traditional manufacturing, new technologies and better supply chain management — have helped manufacturing bounce back. Productivity has skyrocketed; output per hours for all workers in the sector has increased more than 2.5 times since 1987, and in 2015, manufacturing accounted for 12.1 percent of GDP in the nation’s economy, according to the National Association of Manufacturers.
To continue this upward trend, manufacturers can seize the opportunities available in a new era of efficiency by keeping five things in mind:
No. 1 — Remember that quality starts at the top. Quality is a way of life for a manufacturer and must be embedded into its DNA — and it has to start with the leadership, who are responsible for setting the pace with a non-negotiable approach to quality assurance (QA).
An emphasis on QA will bring positive returns for a business. According to a Hewlett Packard report, a growing focus on QA and testing can improve business outcomes such as customer experience, revenue growth and uninterrupted business operations: “It is no longer simply about getting a product or service to market quickly and with as few defects as possible. Instead, it is about transparent business risk profiling and a shifting left of quality responsibilities, along with upgrading critical QA enablement components… together, these will drive effective decision making and business results.”
However, this does not mean that effective products have gone out of fashion.
No. 2 — Relentlessly pursue improvement and attention to detail. Although it may seem counterintuitive to cite a Silicon Valley mantra when discussing manufacturing, the idea of “fail fast, fail often” can be extrapolated into the sector — but with a twist: “Force the failure, so you fail fast and not often.”
Manufacturers who always push the envelope and challenge themselves will end up with a superior product by proactively mitigating risk points. They must be intolerant to product failure once it gets past the testing phase, even for the most minor details.
Customers will pay for more expensive products, but it is critical that the higher price tag is balanced with superior quality, and that customers perceive that quality in every facet of the product, from packaging to specs to customer service. Use innovative technology to improve everything you make and sell.
No. 3 — Build a dream team. These days, almost everyone has some type of specialized skill, certification or degree, and lots of people know how to package themselves and market their skills — but to build the best team, it’s important to look beyond the façade into a person’s true character. Specific skills sets remain important, but learning who employees are as people should be just as crucial during the hiring process.
Look for people who always rise to meet a challenge and solve a problem — that will be the true key to their success and yours. Find people who will challenge you and help create the best possible products, resulting in a high quality standard. It was this attitude that helped America put a man on the moon, and the individuals with that kind of can-do attitude are the ones you want on your team.
And it doesn’t end with hiring the right people — they need to be given the right training and tools to do their jobs to the best of their abilities. Without a cohesive employee onboarding and continuing education process, all the best manufacturing systems in the world don’t matter.
No. 4 — Remember the customer. This means not just the end users, but also your own partners, who are in turn your customers. Think about horizontal integration — how can you help your customers extend the reach of their products into new markets? This helps you to be not just a manufacturer, but also a true partner.
Constantly solicit feedback from your distribution partners, listen to it and incorporate it. Ask how the selling is going, whether they think the relationship is successful and how it could be improved.
Any and all feedback is valuable. For example, a partner may say you need to improve your products because customer demand is decreasing, or that technology has moved beyond the former value proposition. This may sound negative, but it will help you make better products and improve customer satisfaction.
Alternatively, any negative feedback might reveal that you have not provided key information to the partners — a specific tool or proper training during a technical enablement. You can take this opportunity to retrain and re-engage with your partner and improve their knowledge and understanding of the product.
Remember, partners have the power to help you improve anything from product development to delivery mechanisms. Partners often want to give feedback, and soliciting and utilizing it is one of the greatest ways a manufacturer can maintain its relevance, demonstrate its commitment to its partners and evolve as a company.
No. 5 — Never stop adding value. When you add value to your own products, you in turn add value to your partners’ products — and the sooner that happens (e.g., in the design phase), the sooner everyone benefits.
Your products must reflect attention to detail and high quality standards so that end users benefit and continue to buy, but it’s also important that products seamlessly integrate with your partners’ offerings. Your partner should be able to see that distributing your product strengthens and enhances its own value proposition to its customers.
For example, one of our company’s partners is Rajant, which pioneered innovative mobile mesh technology for private wireless networks. To maintain a healthy partnership, we have to ensure that the quality of communication hardware we manufacture for them consistently meets their high quality standards and rigorous specs — such as ensuring that their radio nodes are designed for an IP 67 rating and have the ability to withstand temperatures from — 40° C to 80 C. By ensuring we meet their standards, we provide the best possible product for their customers — helping both our companies profit.
However, while quality products remain vital, a partner also needs to feel confident that a manufacturer can support it in other ways as well.
Build a business case for why a partner would want to work with you. While you must show that you can make the partner more profitable, you also must demonstrate that you can give the partner the resources to be successful, such as technical training, sales support and expertise in the field.
As American manufacturing becomes more globally competitive due to new efficiencies and innovations, manufacturers who address these five areas — not just in 2017, but every year — are well positioned for future success.
Kip Anthony is president at EFE Laboratories, Inc. Frank Campanale is COO for EFE.