15 Trends to Watch
Globalization, the Internet and streamlined furniture factories are among the many challenges and opportunities awaiting us in the 21st century.
We have reached the year 2000 and have managed to keep from annihilating our species from the face of the earth. Weaponry has advanced from bows and arrows and catapults to cruise missiles and hydrogen bombs. The past millennium has seen the human race migrate throughout the world cultivating and industrializing practically every inhabitable land and exploring the rest -- even the moon.
It seems like yesterday that President John F. Kennedy issued the challenge to land a man on the moon and return him safely home. That challenge was responsible for igniting more rapid change in the world through the proliferation of technology than any other event in recent history. The miniaturization of electronic circuitry gave birth to the computer age. Satellites have forever changed the notion of communications.
Today, practically every nation on earth is aggressively “plowing the sea” to globalize its economy. No longer can any one nation depend solely on its domestic trade or on trade with its immediate neighbors to supply the needs of its citizens who are hungry for a better standard of living.
As a result, a huge middle class will emerge in what were previously considered Third World nations throughout the globe during the 21st century. These tens of millions of consumers will seek out products and services on which to spend their new found wealth. Our challenge is to find ways to capitalize on the demands as well as the needs of consumers at home while making a profit in the process.
How will this be accomplished during the next century in the woodworking industry? I share some thoughts and visions in the paragraphs that follow. You may take issue with some of them, and that's good. However, don't dismiss them all. Please take heart to the message in the accompanying article, “Coloring Outside the Lines.” I'm confident that at least some of what I have to say will hold the key to your company's future success.
Here goes; have fun!
The following are a few of the trends that will necessitate using this management tool of the 21st Century mentioned in the adjacent box. The only trend I have listed in order of impact on the future is the first one -- and it is a biggie.
1. Globalization: Globalization in the woodworking sector will continue to accelerate during the 21st century and serve as the most important influence on this industry for the next few decades. This will not only apply to furniture manufacturing but to the business of every reader of this article. No matter how loud the cries for protectionism, trade barriers will not happen except for brief periods in a few small sectors of our economy. The floodgates to free trade are wide open.
As I mentioned in last month's article on supply chain management, global sourcing and outsourcing will become mandatory for survival. Manufacturers and suppliers alike will form strategic alliances with partners all over the globe. Some will be manifested through joint ventures and some through mergers and acquisitions. However, the vast majority of companies will seek off-shore collaboration at its highest level as a strategy to compete with larger and stronger capitalized companies. These companies will work together as though they were one, but in fact will be separate entities taking the strengths of one to negate the weaknesses of the other.
Successful U.S. manufacturers and suppliers will emphasize exports as well as imports in structuring these alliances.
Communications in this global environment will be difficult for many at the beginning of this decade, but by the end of the next decade, equipment to translate word and speech instantaneously will be affordable and send globalization roaring down the tracks.
Aircraft and seacraft designed to speed products around the globe with very little fuel consumption will be invented and will give new meaning to “quick ship” and short lead times.
2. Sharply Focused Factories: Factories will become more narrowly focused. Instead of producing hundreds or even thousands of SKUs, the new millennium factory will make a narrower product line to be in harmony with factory capabilities. Mega factories will be split into smaller micro factories within. This will result in very short lead times at lower costs thus carving new niches in the market place.
Factory managers will realize they must outsource parts and products which they cannot produce competitively in order for them to become focused. This will result in fewer vertically integrated companies.
3. Manufacturing Managers Will Become GCO's: The manufacturing managers of companies will in fact become GCOs -- Global Communications Officers. Their jobs will be to gather information from all over the world and to see that all of their factories and support companies around the globe are working toward the central goals of the company.
4. Lot Sizes of One!: Lot sizes of one will become reality as developing countries leverage cheap labor and newly acquired technology. These companies will carve new niches in the World Wide Web marketplace.
5. Mega Mergers: Manufacturers of electronic components and home furnishings manufacturers will merge to form companies to produce “furnitronics” to house inventions that today are still in someone's box of Crayolas. Later, these furnitronics companies will merge with home builders to form even bigger companies.
6. New Capitalization: Large vertically integrated companies will go through intense capitalization in machinery and methodology to produce more efficient flexible factories to compete with smaller manufacturers throughout the developing world.
7. Revival of the Small Manufacturer: New small start-ups will increase dramatically as larger companies are unable to use their crayons to adapt to rapid change. Many will go out of business, thus opening new opportunities for entrepreneurs. A majority of these will be assembly plants with some specialized manufacturing capabilities.
8. Empowered Employee Owners (EEOs): Employee ownership and empowerment will become the norm. This will be the manifestation of a new “American Dream” that will restore company loyalty and motivate people to make their company the best. There will be hundreds of EEOs running around with their boxes of crayons in hand thinking of ways for their company to make more money and making decisions for change on the spot. These companies will be the long-term survivors of the 21st century.
9. More Logging Restrictions: As I w
Have something to say? Share your thoughts with us in the comments below.