Manufacturers will have better opportunities for growth domestically and internationally if they can encourage innovation, maintain a global viewpoint and look at new options in their workforce and financing.
Forging new partnerships: How to Thrive in Today's Global Value Chain looks at market and management challenges facing small (defined as fewer than 500 employees) and medium-sized manufacturers (500 to 2,000 employees).
The report includes interviews and best practices with members of the National Assn. of Manufacturers, results of a survey by RSM McGladrey and information from the NIST Manufacturing Extension Partnership. For the complete report, go to www.nam.org/supplychain.
Old supply chains vs. new value chain
One of the biggest changes is how manufacturers are related to one another, the report says. The old supply chain linked primarily domestic suppliers to companies that made a final product and sold it to the end customer. Components flowed through the supply chain while the final producer determined product design, pricing and service.
Today's new value chain leans on interdependent relationships between companies. Value and innovation are created at all levels and in collaboration with outside companies. Manufacturers don't just build components, they are partners from the beginning, helping develop new technology, processes and product designs. In woodworking, we're seeing this in component manufacturers delivering parts that are finished and ready for assembly, and in millwork or store fixture manufacturers that are involved in the designs on the front end.
Taking advantage of opportunities
Ongoing innovation. Successful companies need a commitment to innovation in processes, technology, strategies and products. Continuing innovation allows companies to respond to changing market forces and avoid becoming a commodity player. .
Getting a global viewpoint. Manufacturers must define their position in a global supply chain by looking at options and possible challenges and rewards. This might include buying foreign materials or selling overseas.
Community colleges and workforce options. Manufacturers have to find new ways to hire, develop and keep a quality workforce. The report states that it's up to each company to make sure they have the best workforce possible. They shouldn't expect help from government or outside sources. Community colleges can be a source for talented workers and as partners in research projects.
New financing options. New investment strategies made with the proper analysis will help fund innovation and expansion. Manufacturers should take advantage of tax laws and government programs that can help.
Another important strategy is to connect with other companies in your own industry, suppliers, customers, government and academia. Collaborating will help companies gain economies of scale and take advantage of today's opportunities.
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