Through good relationships (and good fortune, too) I have the opportunity to be on several small manufacturing company boards. Just as in the case of Erie Plastics, although the industries (telecommunications, automotive supply and injection molded packaging) are considered to be “commoditized”, all of these companies have special niches which they have successfully defended for many years. Nonetheless, the pressure from customers and competitors, which seems like it could never get any tougher, notched up dramatically again in 2007.
As the year comes to a close, I would like to offer a toast to those of us still surviving in this small North American manufacturing category; “Cheers and kudos to the global manufacturing survivors”!
You might think that with three very unrelated businesses in totally disparate categories, we would all have unique challenges. But in the end, the similarities are unnerving:
• Challenging pricing driven by substantial industry over-capacity.
• Fiercely demanding customers ever confident that there is “another 20%” to be wrung out through negotiations, electronic auctions and allowing the competitive enterprise system to do its job.
• The never-ending quest to improve quality, output and productivity.
• Unremitting pressure on profit margins.
But probably on balance the most vital positive factor is indomitable impulse to survive and grow. One would assume that the extraordinary negative pressures of these industries would have numerous competitors simply giving up, turning off the lights and going home. However, quite the opposite continues to happen every day. The entrepreneurs and the senior management teams continue to find ways to beat the odds. (I always call it “defying gravity”.)
So, as the year ends, we welcome with open arms renewed interest in parts being manufactured in North America rather than Europe and Asia. We also look forward to the ingenuity that allows these companies to find ways to protect their product lines and American jobs. Finally, we salute those companies who have found a way to identify and create new “barrier to entry” product lines, open new markets, innovate new processes and to just plain keep on beating the odds!!!!!
HAPPY NEW YEAR!