As most manufacturers suffered during the recession and haven't seen robust growth since, it seemed appropriate to discuss what my best clients and contacts are doing to jump on board the resurgence. There are a few key strategies they have in common: 1) Focusing on the export market. 2) Investing smartly. 3) Leveraging relationships.
1. Focusing on the export market: Undoubtedly, the manufacturers and distributors growing most rapidly have export business. It's not required to grow yet it certainly jump-starts dramatic growth. For example, according to one manufacturer with export business, the last two months have been 30% higher than last year. Not too shabby!
While listening to an export panel at the Manufacturing Summit, I learned that significant growth is not uncommon especially with Made in the U.S.A. products. This is especially true in industries regulated by the government such as by FDA. International consumers are quite interested in these types of products as they can "count" on the quality.
As the vast majority of the world's population resides outside of the United States, it only makes sense to expand internationally. There are programs designed to support companies interested in exporting; thus, the opportunity exists if we are interested in taking advantage of it. Sure, there are additional complexities; however, you can avoid issues with a bit of common sense and research.
2. Investing smartly: Certainly during the recession, I had trouble finding companies interested in investing - in anything. No ERP system upgrades. No capital equipment. And in several cases no cash outlays even with huge returns (like 10:1 or 15:1 returns on investment). However, I've found studies from ALL past recessions inclusive of the Great Depression that has proven the opposite - in essence, those companies that invest during these times of crisis leapfrog their competition.
Of course, if you took advantage of the recession to make smart investments when your competition didn't, you're likely growing rapidly in comparison. However, if you haven't, all is not lost. I find that although my typical clients have more cash, they are still a bit reluctant to spend it in today's environment of volatility. In general, they are starting to put their toe in the water; thus, if you'd like to join the resurgence, jump into the water for solid opportunities!
3. Leverage relationships: It might be hard to understand how relationships can be a key to success yet it has proven time and again to be so! In today's new normal business environment, it is not nearly as simple to grow sales and increase profitability as it was during the boom years and when supply chains were less complex.
In my experience, those companies that partner with suppliers and customers to elevate the entire supply chain not only perform far better than the rest but they also generate additional revenues by virtue of a relationship-orientation. People purchase from those they respect, like and trust. How can they do that if they don't know you? Or if their only interaction is when you try to negotiate with a win-lose approach? Additionally, as supply chains are increasingly complex with elevated levels of risk, who will you likely support when issues arise?
It is an opportune time to join the manufacturing resurgence. The good news is that it requires working smarter; not harder. Why not put a plan in place, rally your team around it and give it 120 days? You'll be glad you did.
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