Will You Be Competitive?

Knowing who your customers are is an important and complex issue that deserves more than a single bullet-point in a column, because how you approach this one issue can determine your company’s competitiveness, growth and profitability—well into the future. To navigate the long-range waters to a healthy future, consider these issues:

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Last month, I asked in this column, “Are You Competitive?” I covered issues that you can use to measure if you are really competitive in the markets you serve, and if your business appears competitive to your customers and prospects—today. That column was intended to help focus on survival and near-term growth strategies.

Among the questions I suggested you ask yourselves was, “Who are your customers?”

It’s an important and complex issue that deserves more than a single bullet-point in a column, because how you approach this one issue can determine your company’s competitiveness, growth and profitability—well into the future.

To navigate the long-range waters to a healthy future, consider these issues:
• Identify Markets: What markets are attractive for future growth? What opportunities exist in markets you are currently in or those related to your current markets? Turn the tables, and be honest; is a current market you’re entrenched in likely to contract in the future, and should you plan on getting out and into others?  It takes planning and savvy to recognize where the growth is (and isn’t), and courage to move. But there are resources that can help you identify opportunities and construct a sound, long-term strategy. Of course, the Internet offers access to astonishing amounts of data; not only in terms of identifying markets, but what it takes to compete in them. Your suppliers—of capital equipment, tooling, materials, software—can offer perspectives and sage advice that few others in your industry (and other industries) can. Their successful clients in target industries make them excellent resources. And the same goes for associations that your company may be a member of. Many can help with contacts and resources to help you navigate into those target markets.

• Embrace New Technologies: What capabilities do prospects in your target markets require? What capabilities or products do your existing customers get from other markets? What do the most successful businesses in other markets do that makes them successful, and what do they not do that makes them vulnerable? Expanding technical capabilities to service an existing customer with products and services they get elsewhere can be attractive to them because it simplifies their supply chain. And it can help cushion the risk of investment to your business.

While making chips is often the initial focus for most shops looking at growth technologies, don’t overlook other ancillary technologies (for example, inspection, quality, design, logistics, and so on) Also, now may be the time to invest and expand your capabilities when you consider the weak U.S. dollar and tax incentives realized from the recently passed stimulus package.

• Pursue Certifications And Qualifications: What special certifications are required to compete in other markets? Might pursuing specialized qualifications open you up to new business? For example, if you covet the medical markets or want to expand your current medical customer base, you might look hard at ISO 13485 certification, which qualifies the certified to manufacture medical equipment/parts worldwide. Don’t overlook any certifications or compliance, ISO, ANSI, industry-specific certifications, current good manufacturing procedures (CGMPs), as many customers require their suppliers to have those credentials to do business.

• Go Lean: Is your shop lean, and can you prove it? Many customers today see certifications and audits confirming a commitment to lean as a bonus. In the near future, most will require it, especially in particular industries like aerospace, defense and medical. As a manufacturer told me about his company’s lean strategy, “It was either do it and save money now, or do it later to survive.”

Not only has thriving in the U.S. manufacturing market become more of a moving target, the targets are moving faster. Identifying and engaging the right customers in the right industries isn’t an easy proposition, but it’s essential to the long-term health of your business.