Volume 2, Number 3 - March 2, 2004

As we read about the problems of a growing trade deficit and the “jobless recovery”, we know that one factor is our customers, our competitors, and our suppliers moving many of their operations to Asia. Should you join them?

Two possible questions that may logically lead to that decision are:
1. Are you struggling with how best to leverage your organization’s outstanding skills in international logistics, collaboration, cultural integration, and communication while overcoming limitations in your manufacturing operations?
2. Are you wondering how best to penetrate the Asian market for your products?

While those questions may well lead to a decision to begin operations in the low wage countries of Asia, the pressing questions faced by many manufacturers may require a different answer.

Organizations that have difficulty communicating effectively internally will see that problem magnified when choosing to rely on foreign operations. Organizations without solid readily available expertise in currency and political risks may regret intensifying the role of those factors in company success. Companies that compete on speed will have to overcome the implications of adding 60 - 90 days shipping time to the supply chain. Companies
without good forecasts may incur increased inventory and obsolescence costs, as well as cash flow challenges. These are not insolvable problems, but they have to be dealt with successfully for an Asian strategy to work.

There are many reasons why each of you has to consider the impact of Asia as a potential source of supply. Just don’t forget to look at your own organization’s skill base first. The flame looks good to the moth, but things are not always as pleasant as they appear.

Congratulations to these Cleveland area plants for being selected tour sites for the May 18-20, 2004 conference: Tuthill (Berea), Sunrise Medical (Avon Lake), Parker Hannifin (Elyria), Kraftmaid Cabinetry (Middlefield), and Delphi (Cortland). The Delphi plant is a prior Best Plants winner; all tour sites have all realized amazing results through implementation of a Lean philosophy. Rebecca A. Morgan serves on the tour site committee.

We wonder why people keep smoking, despite all the information that a change in behavior is needed. We wonder why people continue to super-size their meals, despite all the information that says a change in behavior is needed. And then some of us go to our offices to continue running our businesses the way we always have, despite all the information…..

2.8 million manufacturing jobs have left the United States in the last 4 years, many of them never to return. There will always be manufacturing somewhere as long as there is a need and want for “things.” Manufacturing can be profitable for those who do it well in concert with solid business and marketing plans. Manufacturing can be profitable in the United States. But even if labor were free, profits are not guaranteed.

Assuming you have at least an average hiring process, most of your employees want your company to succeed. Most are willing to learn, work, and change to make it happen. They need your leadership and your support. Make sure your strategy is defined, communicated, AND understood by your employees. It may involve Asia, or it may not. But it must be clear.

Fulcrum ConsultingWorks, Inc. All rights reserved.
For reprint permission, just give Rebecca a call
or e-mail her at [email protected]