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Four Marketing Action Items for Manufacturers

In today’s highly competitive marketplace, meeting customer demand isn’t enough. Small and mid-sized manufacturers must have a continuous pipeline of new sales in order to thrive and grow. However, it is becoming more challenging to connect with key decision makers to accomplish this.

Technology is constantly evolving and has changed how people communicate, research products and parts, and make purchasing decisions. In comparison to the past, your target audience now has more control over the sales process. The internet enables them to easily research information and pricing at the blink of an eye. Caller IDs, gatekeepers, spam filters, and “no soliciting” signs are making it more difficult for manufacturers to proactively connect with prospects. And the nonstop barrage of advertisements and sales pitches are making it more difficult to become memorable.

Developing a robust marketing program is crucial to increasing sales and sustaining growth. Here are four action items your business can take to improve your marketing outreach efforts.

1. Establish a Marketing Strategy

Before you start sending out e-blasts or tweeting, your marketing initiatives must be driven by a structured strategy. An organized marketing strategy provides companies with the necessary foundation required before moving forward. While the specific defined goals and objectives are unique to every manufacturer, businesses are typically looking to achieve the following:

  • Enhance brand awareness
  • Generate new leads
  • Convert leads into sales
  • Increase sales from current and former customers

It’s vital for manufacturers to have a strong marketing strategy in place, so take the time to identify your goals and create a calendar of your efforts. Your strategy should also be written down and communicated with key decision makers. It is also vital to include leveraging multiple marketing channels, as targets communicate in different ways.

2. Update your Website

Your website is essentially a “digital salesperson” for your organization. If your website isn’t consistently generating new leads and sales for your company, it’s time for an upgrade. A successful website does the following for your team:

  • Gets found by quality prospects when your products and services are looked for in search engines (Google, Yahoo, Bing, etc.)
  • Establishes your industry credibility
  • Engages with and nurtures website visitors at all stages of your sales cycle
  • Depicts your brand in a positive light
  • Provides your team with data and analytics to help the sales process

In addition to dynamic graphics highlighting your brand, updating your website’s content is critical to digital success, as your content should provide a simple journey for your website visitors. Providing helpful information via checklists, white papers, blog entries, and eBooks will help you engage with your audience. Sharing case studies and testimonials validates your business.

Whether you have an internal marketing specialist or use an outside vendor, Search Engine Optimization (SEO) and Search Engine Marketing (SEM) efforts will help you increase website traffic. In the age of smartphones, it is also imperative to have a mobile responsive design.

3. Embrace Social Media

Social networking is no longer a fad – it’s a regular method of communication and conducting business. Social media platforms can help your team connect with new prospects, showcase your products, share content, and increase your website traffic. Here are some ways manufacturers can use the most popular social media sites:

  • LinkedIn – LinkedIn has a plethora of established networking groups where people can share information, ask questions, and network. By joining LinkedIn groups, you have an ability to connect with targeted leads and gain insight into industry news and trends.
  • Facebook – This is a great way to constantly engage with customers and prospects to share content, gain feedback, and upload pictures and videos to personalize your company.
  • Twitter – While it allows only 140 characters to share a message, Twitter is an easy way to quickly distribute company news and pictures.
  • Pinterest – This platform is very visually based, so companies can share pictures of their products, parts, and processes.
  • YouTube – From product reviews and product demonstrations for potential consumers, to quick FAQ videos for current customers, YouTube can help you connect with multiple audiences.

4. Rework your E-mail Marketing Communication

Your e-mails or eNewsletters require more substance than just shooting out your sales pitch and hoping for the best. People receive a superfluous amount of emails, so yours have to be targeted, personalized, and unique. Here are five quick tips to improve your e-mail outreach:

  • Branding – Your e-mail templates should be consistent with your brand. Incorporate your company’s logo, color scheme, and messaging into your e-mail communication.
  • Content – Share information that genuinely helps your target audience. Providing how-to tips, industry news, and solutions to their problems will help you establish your credibility. All e-mails should have a clear “call-to-action” at the end and include links to your website.
  • Scheduling – Sending out a single e-mail here and there makes it challenging for your audience to feel an ongoing connection with your company. Whether it’s monthly or quarterly, have a consistent email schedule and stick with it.
  • List Maintenance –  Individuals leave companies, organizations go out of business, and professionals get promotions. Consistently cleaning up incorrect e-mail records and adding new e-mails to your database will help you keep the list fresh.
  • Analyze Results – All e-mail marketing software vendors enable you to evaluate the tracking results of an e-mail campaign including views, un-subscribes, and click activity. This information will help you when you’re developing content for follow-up or future campaigns.

Connect with the MEP Network

The MEP National Network is a public-private partnership providing business services to small and medium sized manufacturers across the country. Services offered by MEP Centers help manufacturers in various capacities, and include business growth efforts such as the development of sales and marketing strategies.

A comprehensive marketing program is essential for developing new business and achieving sustainable growth. Connect with your local MEP center to learn more.

NIST, Partners ‘Cutting the Cord’ (and Wires) from Factory Communication Networks

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Credit: F. Webber/NIST

Providing wireless communications in a factory, plant or other industrial environment these days means more than just helping employees talk with each other while they work. By eliminating physical connections such as wires and cables from a facility’s communication network, wireless technology offers many manufacturing, chemical processing and municipal (such as water treatment) organizations a means to run their entire operation more efficiently, more productively and at less cost. However, a perceived lack of reliability, integrity and security has hampered the adoption and use of industrial wireless, especially when wireless communication can often be corrupted or disrupted in harsh industrial settings.

Through its Wireless Systems for Industrial Environments project, the National Institute of Standards and Technology (NIST) is working with private-sector collaborators to overcome these obstacles and make industrial wireless communication a more viable choice. The latest milestone in this effort is a newly published study in which rigorous scientific experiments evaluated how well radio frequency (RF) signals propagated in three different factory environments: an automobile transmission assembly facility, a steam generation plant and a machine shop.

“Understanding how RF platforms work or don’t work in these harsh environments is the first step toward designing and deploying reliable wireless networks,” said NIST’s Rick Candell, the lead researcher on the study. “With the data from this research and future tests, we can define factors that can hinder RF propagation—including heat, vibration, reflection, interference and shielding—and then develop measures to address them.”

In their study of the three factory settings, Candell and his colleagues looked at three RF propagation characteristics. They made precise measurements of how the signals lost power over distance, dispersed over the factory floor and varied in strength due to absorption or reflection by the specific environment. “We clearly saw that wireless transmission of data in industrial facilities is completely different from signal propagation in a home or office setting,” Candell said. “It’s a harsh environment where reflective or absorbent surfaces, interference from competing RF signal traffic and other obstacles must be overcome if we want to deploy secure, integrated wireless platforms that perform dependably.”

The researchers performed mathematical and statistical analyses of the data from the three factory experiments and are incorporating them into a NIST test bed designed to replicate a manufacturing environment. This “factory in a box” re-creates the conditions found in a variety of industrial settings, allowing researchers to study the impacts on signal propagation in controlled laboratory conditions.

“The test bed supports the development of measurements and tests to evaluate signal performance, gives us the means to evaluate the usefulness of NIST computer models and simulations of wireless networks, and hopefully, will help us design and road test solutions to current propagation problems,” Candell said.

The NIST team also wants to hear from people involved with factories and plants about their specific industrial environments, including details about layout, structural makeup, operations and communications networking, as well as future needs and plans for wireless. “We hope that more managers will consider letting us conduct field trials of wireless in their facilities, especially ones with outdoor operations such as oil refineries or with possible signal-absorbing materials such as paper mills,” Candell said.

The Wireless Systems for Industrial Environments project will be featured in a panel session on wireless networking for industrial automation on March 13, 2017, at the IEEE Sensors Applications Symposium(link is external) at Rowan University in Glassboro, New Jersey.


R. Candell, K.A. Remley, J.T. Quimby, D. Novotny, A. Curtin, P.B. Papazian, M. Kashef and J. Diener. Analysis of Radio Propagation Measurements in Three Factories (NIST Technical Note 1951). January 2017. DOI: https://doi.org/10.6028/NIST.TN.1951

The Evolution of 3D Printing

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From reducing costs to increasing efficiency to spurring innovation, many people are excited about the impact that 3D printing will have on the future of manufacturing. However, the truth is, it already has made a significant impact on the industry.

Take a look back at the evolution of 3D printing to see how the phenomenon started and how it has helped the manufacturing industry evolve.

The 1980s: Setting The Foundations Of 3D Printing

3D Printing was only an idea in the 1980s. In 1981, Hideo Kodama of the Nagoya Municipal Industrial Research Institute in Japan discovered a way to print layers of material to create a 3D product. Unfortunately, Kodama was unable to get his patent for the technology approved.

Meanwhile, in France, the French General Electric Company and CILAS, a manufacturer of laser and optical technology, found a way to create 3D printed objects. However, the companies didn’t see a use for the technology, and they soon abandoned their discoveries.

Finally in 1986, an American engineer named Charles Hull created a prototype for a process called stereolithography (SLA). Hull used photopolymers, also known as acrylic-based materials, to evolve from liquid to solid using ultraviolet lights. Hull patented the SLA printer and other companies followed suit. Hull is commonly referred to as “the father” of 3D printing.

Two other key technologies were patented during this period as well – Selective Laser Sintering (SLS), which uses powder grains to form 3D printed products; and Fused Deposition Modeling (FDM), which uses heat to layer 3D models. These 3D printing models set the foundation for 3D printing.

The 1990s: More Technologies And More Adoption

With the foundation of the technology already created, companies began experimenting, expanding and, ultimately, commercializing 3D printing.

Several new 3D printers came to market, including the ModelMaker from Solidscape®, which deposited wax materials using an inkjet print head, which was more common to traditional printing.

New processes, such as microcasting and sprayed materials, allowed 3D printing to be used for metals, not just plastics.

However, the technology was still cost prohibitive. As a result, adoption was limited to high-cost, low-volume product production. Thus, it became a natural fit for prototyping new products in the aerospace, automotive and medical industries.

The 2000s: 3D Printing Explodes

While there were iterative changes and innovations related to 3D printing throughout the early 2000s, 2005 marked the year that 3D printing went on the path to becoming more mainsteam. Many of the early patents began to expire, and inventors and entrepreneurs sought to take advantage.

A professor in England named Dr. Adrian Bowyer made it his mission to create a low-cost 3D printer. By 2008, his “Darwin” printer had successfully 3D printed over 18% of its own components, and the device cost less than $650.

When the FDM patent fell to the public domain in 2009, more companies were able to create a variety of 3D printers and the technology became more accessible.

3D printing began making mainstream headlines, as concepts such as 3D printed limbs and 3D printed kidneys were fascinating and potentially powerful.

The 2010s And The Maker Movement

As the cost of 3D printers continued to decline, the demand for the technology began to soar, and they became more commonplace in the home and in businesses.

On the shop floor, manufacturers began leveraging 3D printing in a variety of ways. Machine parts could be repaired quickly, and inventory shortages could be combatted with ease.

By 2014, the industry generated more than $1 billion in revenue. But along with the impressive financial impact of the technology, 3D printing also made an impact on how people work.

People were now free to make and create new products on their own, without relying on companies or technology firms. This empowering shift is fueling The Maker Revolution, which values creation and focuses on open-source hardware.

The Future Of 3D printing

The 3D printing industry keeps on growing, so what should we expect in the future? According to a recent analysis by A.T. Kearney, 3D printing will experience a compound annual growth rate (CAGR) of 14.37 percent to nearly $17.2 billion between now and 2020. That means 3D printers will be found in your own home as well as in the classroom.


Another recent study determined that 6.7 million 3D printers will be shipped globally by 2020 – 14 times more than in 2016. As new technologies improve the uses of 3D printers, the technology will continue to disrupt the manufacturing industry and bring it to greater heights.

By Christina O’Handley |  January 25, 2017

 

Data and Trends in US Manufacturing

This is an excerpt from a blog by  

The survey asked a range of questions focusing on how Georgia manufacturers deploy information technologies, management practices, and production technologies. The survey also looked at the benefits of different business strategies, the use of in- and out-sourcing, and talent development practices. Just over 500 manufacturers responded to the survey. Here are some of the interesting highlights:

  • Nearly half of the manufacturers reported using some type of business assistance provider. The most common sources of business assistance came from universities and technical schools, state agencies, and private consultants.
  • Manufacturers’ needs are diverse. Marketing and sales is the top concern among Georgia manufacturers in 2016. Finding employees with the right technical skills was the second most common need or problem. Improving manufacturing processes through lean manufacturing was the third most frequent need identified. Finding employees with the right basic skills was another significant issue. Each of these four problems/needs increased significantly from the 2014 survey.
  • Different business strategies lead to different bottom-line outcomes. The most important finding from the survey is that innovation has a bottom-line benefit for companies and their employees. The following chart suggests that firms adopting a strategy of innovation have higher profitability and pay higher wages compared to firms adopting other strategies. However, the difference in the returns to different strategies has narrowed over time.

Chart: Returns to Different Business Strategies

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  • Manufacturers are introducing new and improved products and services. Just over half of the respondents (51 percent) reported introducing a new or improved good or service within their establishment during the 2013-2015 period. Forty-five percent of the respondents reported introducing a new or significantly improved product and just under 15 percent reported introducing a new or improved service. These goods and services were split between two types: 27.6 percent were reported as being introduced before other competitors and 28.2 percent were new to their facility, but already available from competitors.
  • New goods and services represented a modest portion of total sales. On average, 12.6 percent of total sales came from goods and services that were new to the market (the median was 10 percent) and sales from goods and services new to the firm, but not the market, represented about 19 percent of their total sales (the median was also 10 percent) based on new goods and services introduced over the last three years.
  • Firms introduced a range of process innovations in addition to introducing new goods and services. Fifty-six percent of the respondents introduced a process innovation into their plant. Forty-four percent reported adopting new or improved production technologies and techniques, just under 13 percent introduced new or improved logistics, delivery, or distribution methods, and 23 percent reported other improvements including improvements in purchasing, accounting, or maintenance processes.
  • Firms engaged in innovation activities focused on their organization. Nearly 60 percent of the firms responding improved their strategic planning, improved their internal management systems, restructured their organization, and their relationships with other firms. Twenty-two percent reported new or significant changes in corporate strategy while 24 percent implemented new or improved management systems. Just over one third of the respondents reported restructuring how work was organized (35.1 percent), and 23 percent reported changing their relationship with other firms including new alliances, partnerships, outsourcing, and subcontracting.
  • Manufacturers deploy wide new manufacturing technologies and techniques. The survey asked respondents about their current or planned use of 19 manufacturing technologies and techniques. The table below shows increased deployment of these techniques compared to the 2014 survey. ERP software for scheduling and inventory control is used by seven in 10 respondents and computer aided design is used by 67%. Surprisingly, lean manufacturing, quality systems or adoption of various ISO standards were being used by less than half of the respondents.

Chart: Current and Planned Use of Various Technologies and Techniques

practiced-now-chart

This data provides a look inside manufacturing firms and their activities. The survey focuses on areas including innovation, growth, and other issues including sustainability practices, workforce investments, and the adoption of new manufacturing processes and tools. It breaks the information down by firm size and industry. In fact, the aggregate results I reported above mask significant variation across industries and firm size. It is worth scanning the report to see how your firm stacks up or to see where things stand for a cross section of companies.

Mr. Voytek is the Chief of the Manufacturing Policy and Research group and the Chief Economist with the Manufacturing Extension Partnership (MEP) program in the National Institute of Standards and Technology (NIST).

Your Corporation is Killing Innovation without Knowing It

Before innovation even starts, corporate alarms are ringing and walls are raised.

In the post-recession economy, markets are changing faster than the mighty corporations of old can keep up with. To combat the epidemic of nimble startups, corporations are advocating fresh thinking such as prototyping, failing fast and quick iterations based on customer feedback.

But few if any corporations have been able to point to any concrete successes, no matter the size. Why is that?

Large organizations are always going to be risk averse

A publicly traded corporation must not only appease shareholders but also Wall Street analysts and the corporation’s executives who hold the purse strings are rated predominantly on financial performance.

New ideas within corporations don’t always achieve short-term profitability, and thus it is difficult to convince decision-makers to reallocate capital from an existing cash cow to an “ugly duckling” innovation project. Corporate resources will inevitably go towards incremental established brand innovations and not disruptive new market innovations, which are inherently risky.

Remember that it was Kodak who invented the first digital camera, and chose to continue investing in film R&D over a risky new venture. Everyone knows how that story ended.

Play into the risk-averse nature of large corporations

For a corporate innovation project to succeed, it is necessary to recognize that the executive investing in the innovation project has corporate strategic goals to uphold.

The key for the innovation project’s success then becomes to fit into the corporation’s strategic goals. The following are some key factors to encourage this outcome:

1. Find out what keeps executives up at night – There are two approaches that corporations have found successful 1) use executive problems for innovation challenges and   2) tie the innovation project to or search out projects that match an executive challenge.

EMC and Deloitte have been very successful at taking executive challenges and posing them to the corporation as an innovation challenge, which employees can submit ideas for. Success is derived from the fact that executive buy-in is built in from the onset, because the ideas are directly tied to the executive’s imperatives.

The Citrix Startup Accelerator’s Innovator’s Program and recent Citrix hackathons have engaged with executive sponsors prior to kickoff and used their input on challenges as selection criteria. Much like the first approach, executive buy-in is assured as teams enter the program with ideas that match executive needs.

2. Develop a monetization roadmap – Innovation projects attain a quick death due to a rapid demand for monetization. In some instances, this is possible, but for most, a user base needs to be established before the market is willing to pay.

Ash Maurya is beginning to popularize a framework that calls attention on attaining users prior to revenue.

This model is helpful because it addresses the challenge of organizations understanding the needs of startup marketing versus established brand marketing. Additionally, the framework helps innovation project teams outline what their plans are to eventually reach revenue.

The push to monetization can also be prevented by demonstrating how the innovation project brings other forms of value to the corporation. For example, accessing a new user base to cross-sell existing brands.

3. Gauge executive buy-in throughout the process – Using executive buy-in as a gate to pivot, persevere or kill is critical, because without buy-in, the project is already dead on arrival.

The corporate innovation process should have gates where certain criteria should be met before moving on. At each of these gates, executive input must be acquired and should be used as a determining factor as to whether the gate is achieved.

It is also helpful to prime executives with what the criteria and stages of the innovation process are, so that they are aware of how to judge and assess the innovation project. Otherwise, the executive might have a higher expectation based on traditional corporate outcomes than what could reasonably be expected of an innovation project.

4. Speak the language of the executive – Not only do innovators need to have vision, they need to be able to explain it in the C-suite’s language.

Entrepreneurs are quick to state that startups are liberating versus a stifling corporate culture, but the reality is that even entrepreneurs are beholden to others. Entrepreneurs are bound to their investors, while corporate innovators are indebted to their executives. Both need to translate their vision into a language that their stakeholder understands.

That language is one based on quantitative factors. For investors, the considerations are traction, growth and revenue. For executives, the elements are cost, payback period and top line revenue growth.

5. Get Line Function Buy-In – It isn’t only the C-suite that needs to be convinced but the “doers” as well.

As much as the C-suite needs to be bought into the conversation, the other critical component is the “doers:” mid-level management. Without convincing the “doers” of the project’s necessity, these managers will continue to throw up barriers that will eventually kill innovation within the corporation.

6. Be Selective. Take Baby Steps –  Dreaming the world is great, but taking actionable baby steps is better.

Corporate innovators are great at envisioning future states, but often fail to concretely translate their vision into beneficial steps. In other words, corporate innovators tend to be perceived as dreamers, rather than doers, which relegates their concepts to the bottom of the corporate priority list.

Overcome this perception by ensuring that the initial ask is not only actionable, but also achievable in the short term. Present small projects in the language of the C-suite and deliver on them to build the groundwork for the grander vision.

Corporate innovation requires an understanding of the organization’s needs

Innovation within a corporation requires a recognition that the corporation is inherently risk averse and the only way to push innovation through is to accept this and appease it. Every move and decision a successful corporate innovator makes is based on directly reducing this risk or taking steps to bypass risk by addressing corporate challenges head-on.
By Brian Moelich Customer and Idea Implementation Lead Cisco
This article was co-authored with Eric Quon-Lee and originally published in Huffington Post

The 5 Whys Of Feature Bloat

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Mar 1, 2016 / by Dharmesh Shah

It seems that just about everyone knows that a product that is a large heap of stinkin’ features is a Not Great Thing. There are hundreds of articles written on the topic of good product management and why it’s so important to fight the good fight against feature bloat.

And, if your company is anything like mine (HubSpot), you have a great product team comprised of smart, well-intentioned people who care about the customer and are thoughtful about the classic trade-offs in product management.

So, why do so many products become feature bloated over time — and how do we go about reducing the likelihood that ours will fall into that trap?

As a thought exercise, I thought I’d do a simple 5 Whys Analysis of Feature Bloat and see what road it would lead me down.

1. Why do we have feature bloat?

Because we regularly add new features but rarely take features out. The net result, over time, is that products accrue more and more features. It’s just simple arithmetic. We add more than we subtract.

2. Why do we regularly add features but rarely take them out?

Because adding features is easy. As product leaders, our job is to build great products and create many happy users. Improving the product with new features is a common way to do that. Most of us have a long list of ideas for improvement submitted by customers, prospective customers, our sales team, marketing team, customer team, founders, etc. Most of our time is spent figuring out which of these features to add based on potential impact and available resources — and then adding those features. As product leaders, we may get criticized every now and then for which ideas we picked, but not for picking some ideas. We’re expected to improve the product and add features our users are asking for.

I don’t think I’ve ever seen a product team criticized for shipping too many new features.

So, at a relatively regular rate, we keep adding features.

But, more interesting is: Why do we rarely take features out?

Because taking features out is exponentially harder than adding features in.

3. Why is taking a feature out so hard?

Because it’s hard to justify taking a feature out. Usually, nobody is asking us to take things out. With ideas, there are some people pushing for those particular features. They’re advocating, they’re lobbying, they’re sending you cupcakes and cookies.

But, I’ll bet you a dollar that nobody is sending you baked goods to entice you to prune a particular feature. Chances are, if you are fighting to kill a feature whose time has come, you are fighting that noble fight as a lone hero, and like many lone heros, you are unlikely to get fame, glory or cupcakes for your valiant effort. In fact, there’s a decent chance that you will be battling some folks inside the company (like your sales team) that don’t want you to remove things for fear of impact on likelihood of closing deals.

4. Why is it hard to justify taking a feature out?

Because it’s hard to tell whether removing a feature is worth it.

Some user(s) somewhere probably uses that feature. Some may even love that feature. Some may have bought the product because of that feature. Some may threaten to cancel if you don’t keep that feature.

And that is why product management is so hard. You’re trying to balance different needs for different constituents across different time horizons. Some things make absolute sense in the long-term, but are hard to explain in the short-term.

5. Why is it hard to tell whether removing a feature is worth it?

Because the payback for removing a feature happens over time but the pain from removing it happens right now.

Also, it’s unlikely that the feature is bad. The idea underlying that feature was on the backlog for a while. It was chosen from a long list of other possible ideas. If a feature got added, it was added for a reason, and is doing some good for somebody, somewhere.

In order to be implemented, ideas must survive the brutal battle for resources. Hundreds enter, few survive.

And also…

Because we think that the resources spent adding that feature are a sunk cost. And we learned somewhere along the way that sunk costs are sunk and we shouldn’t let them cloud our thinking.

U.S. Is Now The Preferred Location For New Factory Capacity To Serve U.S. Market As Interest In Reshoring Stays Strong

Of manufacturers planning to add production capacity over the next five years for goods consumed in the U.S., more plan to add that capacity in the U.S. than in any other country — a sharp reversal since as recently as two years ago. And a rising percentage of U.S.-based executives at the manufacturers say they are already in the process of reshoring production work from China. These are among the findings of new research released today by The Boston Consulting Group (BCG).

Thirty-one percent of respondents to BCG’s fourth annual survey of senior U.S.-based manufacturing executives at companies with at least $1 billion in annual revenues said that their companies are most likely to add production capacity in the U.S. within five years for goods sold in the U.S., while 20 percent said they are most likely to add capacity in China. Asked the same question in 2013, 30 percent of respondents said that China was the most likely destination for new capacity devoted to serving the U.S. market, while only 26 percent said capacity would be added in the U.S. (see exhibit).

Even though China will remain a major exporter to the U.S., which accounted for around 18 percent of its total exports through the first eleven months of 2015, the suggestion that the U.S. has surpassed China as the most likely destination for new manufacturing capacity is striking.

The share of executives saying that their companies are actively reshoring production increased by 9 percent since 2014 and by about 250 percent since 2012. This suggests that companies that were considering reshoring in the past three years are now taking action. By a two-to-one margin, executives said they believe that reshoring will help create U.S. jobs at their companies rather than lead to a net loss of jobs.

“These findings underscore how significantly U.S. attitudes toward manufacturing in America seem to have swung in just a few years,” said Harold L. Sirkin, a BCG senior partner and a coauthor of the research, which is part of BCG’s ongoing series on the shifting economics of global manufacturing, launched in 2011. “The results offer the latest evidence that a revival of American manufacturing is underway.”

This year’s survey also confirmed that factors such as logistics, inventory costs, ease of doing business, and the risks of operating extended supply chains are weighing heavily in executives’ decisions to bring manufacturing back to the U.S. Seventy-six percent of respondents reported that a primary reason for reshoring production of goods to be sold in the U.S. was to “shorten our supply chain,” while 70 percent cited reduced shipping costs and 64 percent said “to be closer to customers.”

“The fundamental economic forces that are prompting many companies to reassess their global manufacturing footprint have not changed,” explained Michael Zinser, a BCG senior partner and coleader of the firm’s global Manufacturing practice. “Given the big differences in wage growth and productivity — and the greater attention companies are paying to total cost — there is good reason to believe that the cost-competitiveness of the U.S. compared with China and many other major export economies will continue to improve in the near term.”

The decreasing costs and improved capabilities of advanced manufacturing technologies such as robotics also make manufacturing in the U.S. more attractive than in economies whose chief advantage is cheap labor. Fifty-six percent of respondents said that lower automation costs have improved the competitiveness of U.S.-made products compared with similar goods sourced from low-cost countries. Seventy-one percent said advanced manufacturing technologies will improve the economics of local production, and 75 percent said they will invest in additional automation or advanced manufacturing technologies in the next five years.

Even though they plan to invest more in automation, manufacturing executives indicated that reshoring is still likely to create new U.S. manufacturing jobs. Fifty percent of respondents said they expect that U.S. manufacturing employment by their companies will increase by at least 5 percent over the next five years as a result of reshoring; 27 percent predicted a job increase of at least 10 percent.

Although the core indicators of U.S. competitiveness remain strong, recent turbulence in the global economic environment — such as collapsing energy prices and massive swings in exchange rates — have given some executives pause. The 2015 survey shows that executives believe that the U.S. will account for a slightly lower portion of their companies’ global production capacity than they indicated in 2014. The ratio of those projecting net job increases versus net job losses, while still two-to-one in favor of increases, also declined since the 2014 survey, which found a three-to-one ratio in favor of job creation.

The underlying drivers of this hesitance go beyond global macroeconomic volatility and include factors such as concerns about rising U.S. health-care costs, federal and local regulatory uncertainty, increases in the U.S. minimum wage, and unclear progress on tax reform. Such concerns are causing companies to reassess their long-term manufacturing strategies.

“Although interest in reshoring remains strong, this year’s findings indicate that a number of companies are still holding back,” noted Justin Rose, a BCG partner and leader of the firm’s North American Industrial Goods Operations team who, along with Sirkin and Zinser, is a coauthor of The U.S. Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback (Knowledge@Wharton, 2012). “This reinforces the fact that the U.S. can’t simply rest on positive global macroeconomic trends if it is to fully capture the opportunities created by the shifting economics of global manufacturing.”

AVA Consulting Company specializes in global manufacturing consulting. With over 26 years of manufacturing products for the B2B and B2C market using Agile Manufacturing Methods. Please contact Kevin Armstrong, President of Armstrong Value Add.

In today’s complex global marketplace, your company, organization, or agency needs every advantage it can get.

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The answer is strategic standardization, and it is vital  in making everyday life work.

The U.S. Department of Commerce estimates that standards and conformity assessment impact more than 80% of global commodity tradestar. From design and manufacturing to distribution and marketing, all aspects of your industry’s products and services are affected at some point by standardization.

But how much of an impact are we talking? Just ask the U.S. Department of Defense, which is projecting $789 million in cost avoidance over just one of their programs. How did they do it? They focused on parts standardization and process standardization.

Or ask the electrical fire safety industry. By collaborating on a critical standard for Arc Fault Circuit Interrupters, the National Electrical Manufacturers Association, the National Fire Protection Association, and Underwriters Laboratories have helped to prevent more than 40,000 home fires, over 350 deaths, and more than 1,400 injuries each year.

Or ask Deere & Company, whose agriculture and construction equipment is exported and used around the world. By participating in standards development for component pieces like fittings and fasteners, Deere knows that these components will meet their needs “off the shelf.” And the more standardized components they can use, the less they, and their customers, have to pay.

By participating in standards development activities – and by implementing standards and conformance tools – each of these organizations has been able to streamline processes, trim costs, earn and maintain market access, and boost their bottom line.

Want to learn more? The next tab tells you all about the value of standards to industry, government, consumers, young or emerging standardization professionals, and students. You can also read case studies that describe how companies, organizations, and government agencies are relying upon strategic standardization to meet their goals, and learn how to get involved in the American National Standards (ANS) process.

“Standards allow more organizations to compete to offer the products and services sought and thereby increase innovation, quality, and cost reduction for the procuring organizations. Businesses should be honored for actively seeking for standards-based products and services and not merely acknowledged for compliance alone.”
Ramesh Arunashalam
Wincor Nixdorf Inc USA
Hear what business leaders have to say about how standardization has helped their organizations reduce costs, streamline operations, expand markets, and boost the bottom line.
Beyond the bottom line: standards impact quality, lead-time, factory flexibility, and supply chain management.
 Standardization and conformity assessment activities lead to lower costs by reducing redundancy, minimizing errors, and reducing time to market.
Demonstrating compliance to standards helps your products, services, and personnel to cross borders. Standards also make cross-border interoperability possible, ensuring that products manufactured in one country can be sold and used in another.
Businesses not only reduce the economic risk of their research and development activities by participating in standardization, they can also lower their overall R&D costs by relying on previously standardized technologies and terminologies.
click for more information   Case Studies

A Lean Product Development Process

Using Stage-Gates to Speed the Development Cycle

Abstract

How many products hit the market and are too expensive, too big, don’t have the desired features or take too long to develop?

Lean is a Process Improvement Tool to reduce waste in organizations.  Few processes cross over as many different departments in a company as product development.

Product development can include hard-goods, software or new services.  As the efforts cross marketing, research, engineering, purchasing, operations and sales there are numerous opportunities for the product development effort to stall or reverse direction. This can be due budget problems becoming visible; product definition being rushed and/or the operational problems.

By applying Lean concepts to product development, you can create profitable products faster.  However, before you do, you will have to learn that sometimes slower is faster.

The Lean Product Development Process

  • Return on Investment Analysis
    • Stage-gate
  • Marketing Specification
    • Stage-gate
  • Concept Design
    • Stage-gate
  • Design Product or Service
    • Stage-gate
  • Pilot Manufacturing Run (if applicable)
    • Stage-gate
  • Field Test
    • Stage-gate
  • Launch Marketing Plan
  • Review Product Profitability versus Plan

Each stage of the Lean Product Development Process will be explained.  However, more important than each individual stage is the concept of the “stage-gate”.  A stage- gate is a place in the process that, after everyone signs-off, they cannot go backwards.

Initially, stage-gates can seem to slow down the process.  Until the department or team downstream of a stage-gate accepts the input to their stage of the process the effort cannot go forward.  However, this will actually make the process faster, and much more effective, because it creates accountability and eliminates the possibility of getting a product that is too expensive, slow, large, etc. from getting to the market.  Products are designed to sell profitably and launch when scheduled.

The other importance of the stage-gate process is that as product development progresses, it gets more expensive.  Final design requires more time and resources than concept design. Pilot manufacturing is a significant expenditure due to tooling requirements. Finally, the launch of the product is most expensive of all stages, as the company will be spending money to market the product and will most likely begin marketing expenditures.

Return on Investment Analysis

This stage is the primary responsibility of the Marketing Team.  They will:

  • Understand the need
  • Create the concept
  • Develop sales forecast
  • Identify cost targets
  • Work with Research and/or Development/Engineering to define the product development budget and timeline
  • Present financial return on investment for approval

This initial stage creates the financial case for developing this product or service.  By creating the sales forecast based on initial cost targets, the Marketing Team takes responsibility for the final sales and profits that result from this product development effort.  Because Research and/or Development/Engineering is involved they get early buy-in and communication on the concept.

Once this stage-gate is passed the company agrees to move forward with the concept design.  Management can kill the effort at this point or give its approval to move forward to concept design.

Marketing Specification

The Marketing Product Development Representative will define their requirements for the product or service.  This may include:

  • Critical dates
  • Development budget
  • Target market and application
  • Performance specs
  • Functional requirements
  • Appearance/Size specs
  • Unit-Sales expectations
  • Regulatory standards
  • Competitors’ products
  • Life expectancy
  • Determine field-test sites

When the Marketing Rep documents this list of requirements they will meet with Research or Development/Engineering, who will sign-off and accept this as their concept design input. This is another stage-gate.  Now the project is in the hands of the Research or Development/Engineering Team to create their conceptual design.

Concept Design

If this product involves innovative technology, then typically the Research team will be responsible for concept design.  Research would be responsible for handing the Development/Engineering team a “developable” concept design.  If the product is an extension of existing technology, then typically it moves right to the Development/Engineering team.

Research or Development/Engineering will brainstorm possible designs and create mock-ups of this design if needed and budgeted.  They may work with purchasing to gather preliminary vendor costs. The output of this stage is a conceptual design (which can be a drawing, 3-D model, service or software demo), estimated cost, design timeline and test data if appropriate.

At this stage-gate Marketing, Development/Engineering and Operations must sign-off on the conceptual design.  If they reject it, then the team responsible for concept design has to refine the concept.  This may involve changing the appearance, cost, functionality, etc.

Design Product

This stage is the responsibility of Development/Engineering with input from Purchasing and Operations.  This stage includes:

  • Create detailed design budget and timeline
  • Finalize design
  • Run failure mode & effects analysis (FMEA)
  • Create detailed demo, model and bill of material
  • Create work breakdown structure
  • Choose components and select vendors (working with purchasing)
  • Produce prototype
  • Document test requirements
  • Design packaging
  • Create initial customer manuals
  • Determine final cost

When this is complete and the prototype is produced or procured there will be a stage- gate approval meeting with Sales and Marketing.  They must approval the cost, appearance and functionality.

Pilot Manufacturing Run (If the product is a hard-good)

Pilot manufacturing is a collaborative effort between Development/Engineering, Purchasing and Manufacturing.  While design-for-manufacturability may have been used during final design, this stage represents the transfer from Development/Engineering to Manufacturing.  Vendors and Manufacturing are tooling up to produce parts. When the pilot manufacturing stage is complete Manufacturing is expected to have completed all production and testing documentation (standard operating procedures).

Field Test

  • Install product at customer field test sites
  • Run product
  • Evaluate results with Marketing
  • Make changes if necessary
  • Finalize customer manuals

Pilot run production prototypes are sent to field-test sites.  The purpose of this test is find problems.  These problems may include quality issues, durability, functionality, installation, etc.  Hopefully none are found, but if we were 100% confident of this, then field-testing wouldn’t be needed.  Some organizations have separate Field-Test groups. Often field testing may be done by Technical Service teams or can be managed by Development/Engineering.

Marketing Launch

  • Review launch schedule
  • Distribute promotional material
  • Distribute training material if applicable
  • Train Sales Force
  • Train Customer Service
  • Review initial customer service data
  • Provide feedback to Development/Engineering and Operations

Once field testing is complete and the design in locked down, the company is ready to start selling. Selling must be preceded by training for sales reps, customer service and customers.  The selling process must be planned like all other steps in the product development process.

Evaluate Results

The last step of the product development process is to evaluate results.  This is often- overlooked. Many companies accept the results they are getting.  The most successful companies evaluate the actual results to their original budget.  If sales are under budget then they evaluate why and make adjustments to the next product development effort.

If sales are over budget then this too is evaluated to understand what led to this success.

The Role of Documentation in Product Development

  • Task
  • Primary Department Responsible
  • Specific Person Responsible
  • Measure of Success Description
  • Documentation of Success

It is important to document the product development process.  While we don’t want to create un-necessary paper or electronic files, there needs to be proof that each step of the process is done successfully and a clear definition of what success means.

The actual product development process is usually a minimum of 100 discreet steps. More complex products are far more detailed.  Therefore, we need to define what documentation clearly shows that each step was successfully completed.  The bullet points above provide the minimum information we expect to see on the Product Development Checklist.

Original Author: Mitch Millstein, CFPIM, C.P.M., CQM, CQE Supply Velocity, Inc.

Key Principles to Maximize the Value of Your Service Contracting Business

value formula

 (CEO at Service Trade) wrote this on July 29, 2015.

At some point, every business person or entrepreneur wants to be paid the full value for the investment of time, energy, love, and money they have made in their business.  Whether that payday is an arms length financial transaction with an unrelated third party or a passing of the business to the next generation, everyone wants the satisfaction of believing the next owner is receiving something of great value.  The principles behind maximizing the value of a service contracting business are pretty simple, but it is amazing how often they are ignored in the day to day decision making process regarding what issues get management’s attention.  Keeping the formula and the principles for maximizing value in focus on a daily basis will increase your payday when you cash out, whether that cash is a financial transaction or simply a passing of the torch to the next generation.

school

The formula for value is simple – NC * (LVC – CAC) = VALUE

NC is the number of customers.  Ideally you have many of them because having few is risky for the future owner.  If they lose one or a couple, much of the value of the business is quickly erased.  Also, business you receive from third parties (manufacturers, management companies, etc) generally does not count as value either.  Without a direct, persistent, and meaningful connection with the end customer, your revenue and profit margin are tenuous and therefore not very valuable to the next owner.

LVC is the lifetime value of a customer.  Ideally you get lots of predictable repeat business from each customer.  If each customer is “one and done” with your services, your business is not worth much because you must sustain market advertising or other similar expenses promoting the brand to attract new revenue.  As with having only a few customers, the future is risky when the new owner cannot depend on your current customer base for future income streams.

CAC is the cost to acquire a new customer.  A strong and valuable brand will attract new customers at a lower cost because the marketing and sales expense is low when references, customer service, and brand reputation are strong.  Fighting a trove of negativity in the market associated with poor customer service and negative reviews is expensive (high CAC).  A new owner does not want to spend heavily on advertising because you have created a wall of negativity that must be climbed for each new sale.

If this is the basic formula for value, what are the principles for maximizing value?

Provide AMAZING customer service.  Maximizing LVC means the customer would never think of using any other company for any service that you can provide for them.  It means you get a greater share of wallet over a longer period of time.  Price is important for each service because no one wants to discover they have been gouged when they share their experience with a neighbor.  However, the experience and the ability to recall, review, and share that experience is critical, which means it must have an online digital component (a coffee and tobacco stained yellow paper invoice with cryptic accounting codes finds the trash quickly and will never be recalled, reviewed, or shared).  If you have not figured out how to connect with them online using digital service artifacts that make it easy for them to review and recall your value, you need to figure it out and join the 21st century.

Amazing customer service also dramatically lowers your CAC.  Advertising is an expensive approach to gaining new customers.  The lowest CAC comes from referrals and online reviews that put your brand in the top position among prospects considering the services you offer.  Make it easy for the current customers to rave about you and forward your digital service artifacts onto others or post them online.  If you don’t understand that last sentence, hire someone who does and tell them you want to join the 21st century party that is happening online.

Manage and mine customer data vigorously for new service call opportunities to increase LVC.  Your opportunity to sell more to an existing customer is directly proportional to how much you know about that customer and how easy it is to turn that knowledge into new service calls.  A history of invoices in your accounting system does not count for any incremental LVC.  How much data do you have about their property, equipment, and service history that you can act upon with computing resources to send them a tailored offer online for improvement?  If this last question means nothing to you, hire someone that gets it and tell them to upgrade your filing cabinets to create digital treasure troves.

Finally, create a sales culture that leads to predictable year over year increases in NC.  New customer additions should be an almost daily occurrence with a predictable formula and routine.  When you can predict and bank on the addition of new customers and you can likewise predict that each customer will provide many years of income due to amazing customer service and the ability to mine data for new services, you have built a very valuable business.

The new owners will reflect the value you have built either in the purchase price or in a next generation debt of gratitude.  Either way, your satisfaction will be substantial and genuine knowing you created something of great value by following these principles.

 (CEO at Service Trade) wrote this on July 29, 2015.

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