W&WP July 2003
Nimble and Quick - Your Competitive Advantage
By Tom Dossenbach
Often a company will find itself drifting downstream being carried by the swift current of fierce competition. I have seen companies cutting prices lately as a feeble strategy to compete. Without cost cutting to support such a strategy, those companies are in for big trouble as the red ink begins to flow faster and faster to sweep them further down stream.
No matter what your particular product and market niche, it is becoming increasingly difficult to compete without a sound strategy to counter your competitors' strengths. It is essential that every company recognizes and develops a competitive advantage in its marketplace if it wants to rise above competition and avoid being "burned" by competition.
While there are many differing competitive pressures in the various woodworking sectors, there are two that are universally critical - productivity and lead times (or the time from order to delivery).
There is an age-old nursery rhyme that holds the key to creating a very strong competitive advantage and I hope you keep the image in your mind as you read further:
Jack be nimble,
I can imagine some saying, "Tom has finally lost it."
Sometimes the simple illustrates a powerful truth and this is one of those cases. It doesn't matter if you are a small cabinet shop in Nebraska or a large kitchen cabinet manufacturer in Florida supplying cabinets to custom homebuilders - price and quick delivery are essential.
Store fixture and furniture manufacturers alike will find customers drawn to them if they can provide quality value-priced products in a shorter time than the competition. If you are a supplier to the woodworking industry, this is especially true of you as many suppliers are losing customers to overseas competition - either directly or indirectly.
In the nursery rhyme, the candlestick represents competition and it is lit and it is hot and it will burn. If Jack is not nimble and quick, he is not going to get past competition and is going to get burned - and so it goes for you in your business.
There are three elements in this simple verse that represent the steps necessary to become more competitive - nimble, quick, and jump. We will look at them more closely below.
Even occasional readers of this column have noted that I talk about lean manufacturing quite often. This is because it is so essential in eliminating non-value-added activities that rob a factory of cost-effective, continuous-flow manufacturing that results in shorter lead times and lower costs.
To be nimble means to be without waste and excessive baggage or weight to carry around. Maybe the waste is cumbersome production scheduling and control or just the shear weight of excessive waste in an organization. To be nimble, a company must be physically fit and totally responsive to its customer requirements.
As I write these words, I am on a plane returning from Malaysia. The problem of competitive pressure is present in that country as well as here in North America. Labor costs are rising there while neighbors in Vietnam are entering the market dedicated to leveraging lower labor costs as a competitive advantage. The Malaysian manufacturer is obliged to counter with a nimble strategy to lower its costs.
To compete and keep our doors open, we must become more productive — another synonym for nimble. Every manufacturer on the globe should be involved in a constant effort to be more nimble than its competition. If your company is not one of them, you should consider the fact that there are a dozen companies trying to figure out how to become more nimble than you so they can take some or all of your business.
Today's conditions in our industry dictate that we constantly adjust and re-adjust to the changes taking place. Change cannot be leisurely or casual — it must be continuous, decisive and aggressive and without compromise.
Quick change is good, but it must result in lower costs and shorter lead times in order to contribute to the long-term success of a company. Customers don't want to wait for products and don't want to carry unnecessary inventories in order to provide quick deliveries to their customers.
The quicker a company responds to customer needs, the more secure it becomes as a viable supplier of products in that market. Again, this is especially true for suppliers to the woodworking industry. A company is no stronger than its supply chain and every link must subscribe to these principals.
Slowness to react to the changes in the marketplace or slow deliveries will spell trouble for our "Jack" as he tries to get over the burning candle. Simply stated, these are not times to be slow to react to competition. Instead, it is a time to be proactive.
Most of the readers reading this column represent small companies that have an advantage over competition because they do not have to go through layers of management to get something changed. It is easier for them to go to the owner or to make decisions themselves without a lot of extended analysis and evaluation. If this describes you, leverage it as much as you can.
After a company becomes more productive it must move quickly and implement a strategy to fight competition. Many companies are trying to compete with low-cost Chinese producers. It will be difficult to compete on price alone. It's just not in the cards. Rather, look at your proximity to your customers. If you can give deliveries with very short lead times, you can compete even if your prices are higher.
Unfortunately, there are too many companies that are focusing on the many reasons they cannot compete instead of figuring how to build a lean, responsive company that gives superior service.
Getting prepared must be followed by action that forms a unique strategy for your survival in a specific marketplace. Embracing new and existing technology may be the answer for many to enable them to become nimble and competitive with imports. Others will become innovators of new products and manufacturing processes. Still others will develop a clever supply chain to achieve what they are incapable of doing themselves.
In summary, every company will need to use Jack as a role model to clear the hurdle of competition.
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