For the past several years foreign competition has emerged as a major threat to the moldmaking industry and has weighed heavily on the minds of a majority of businesses. Recently 15 moldmakers and molders traveled to Asia to explore this phenomenon - to find out the capabilities of offshore moldmakers and what can be done to ensure their future success.
The idea of launching this mission came from Glenn Starkey of Progressive Components (Wauconda, IL) and Jim Meinert of Snider Mold (Mequon, WI), was organized by Lori Anderson and Risikat Okedeyi of SPI, and consisted of visits to three places: Hong Kong, Singapore and China. At each stop, the participants listened to briefings by industry professionals, toured moldmaking facilities, and met face-to-face with fellow moldmakers for question-and-answer sessions.
A Landmark Event
According to Starkey, the purpose of the trip was to address a multitude of concerns. "We wanted to learn more about the market there: what it is, what we have in common with some of these companies and how we can learn from these companies," he states. "Secondly, each trade mission attendee, after knowing the lay of the land there, will need to put together a strategy for himself - what areas he will specialize in and what areas he will not care to specialize in, depending on competitive markets."
Anderson concurs. "Moldmakers in general have felt considerable international pressure in the '90s with regards to the global marketplace," she says, "and there's a couple of ways they could look at this situation. They could try and fight the inflow, which in my personal opinion would be to no avail - you can't stop the global economy from marching, and you can't stop the fact that everyone is trading everywhere 24 hours a day. So, if you can't stop it, you have to learn from it."
Starkey's idea for the trade mission was a few years in the making. "I had heard from many different sources in many different places that the customer base here in the U.S. would be facing a growing competitive concern," he recalls. "I wanted to learn if this threat was real, or exaggerated. I mentioned this to Jim (Meinert), saying it would be interesting to see where this all goes and asking him what he thought of the Asian market.
"I had heard two completely conflicting messages: from some people, that overseas moldmakers are able to take away work; yet others would state that the quality and value just wasn't there," Starkey continues. "That's when Jim told me to go there and see for myself. Truer words were never spoken. I put together a trip and pieced together an understanding of the area. It was a very worthwhile trip for me and when I came back I decided that one of the things I should do is to tell my U.S. customer base what some of the realities are over there - both positive and negative. I put together a presentation, Growth Strategies for the U.S. Mold Builder, and gave it to any audience that I could - at trade shows and conventions. It was a road show to spread the word that we have strong advantages, but that there could be some concerns too."
"The main thing is to learn more and put together a strategy to be competitive in the years to come," he adds. "After returning, I said to Jim that I wished I could bring everyone over to see what I had seen and he suggested a trade mission. So we contacted Lori (Anderson) at the SPI, and we decided to lead this trade mission. Lori put it all together and Jim and I recruited people. "Many people considered joining us on this trade mission," Starkey recalls. "When I described it to mold builders, I emphasized that there was a great benefit to being part of a group rather than just buying a ticket and showing up in Hong Kong on your own. We were able to utilize the SPI's connections to see things that an individual typically wouldn't see - we were able to go into universities, to see how their training worked, to meet with U.S. government officials and to see their research and development facilities firsthand."
"Another big benefit of going in a group is the interaction within the group," he continues. "You have a variety of people who are very knowledgeable with varying degrees of experience in varying areas ... so there was a lot of exchanging of ideas and insights along the way. I warned everyone of two things: first, that this would be a full-time obsession for the course of the week, and second, I 'warned' that they would all come back worse than me! After my first trip, my three-year strategic plan started getting implemented three months later. I wanted people to come back and have a strong desire to implement their strategies within their companies now, not someday. Seeing these things firsthand will naturally light a fire under one's strategy!"
A Whirlwind Tour
Starkey and Meinert approached Anderson because of her success with trade missions in the past - she has led five while with SPI in a variety of industries. The trip took about 10 months to plan and cost each participant approximately $8,000 total - which Anderson notes is well worth the knowledge with which each participant came home. "One of the participants told me this was the most important business trip he'd ever taken," she states. "You couldn't get this information from a study, it's just some-thing you can't place a value on - you must experience it for yourself."
The tour started with some business briefings. "The briefings must be really solid," Anderson explains, "from the experts in the region, not just hearsay that you read in Time or Business Week. So, on all three stops we had lengthy breakfast briefings by top embassy personnel, whose purpose in life is to collect data and information on the industries to feed back to the U.S. "In China, they brought in a large U.S. company with a manufacturing presence in China, and the head of the company's Chinese operations briefed the delegation," Anderson continues. "He really told it like it was, it was really phenomenal. All of the briefings were good but he was a standout."
The second part of the trip was matchmaking. Each participant filled out a form indicating the type of company he'd like to meet and his own specific market goals. Then, through the cooperation of the embassy staff and trade associations located in each region, Anderson and Okedeyi were able to match up companies for one-on-one business briefings.
"We had a five-hour session with these companies in a hotel conference room where we had stations separated by partitions for every company," Anderson states. "Everyone would come in who had an appointment. Each participant had a number of appointments at each stop we made. It gave the participants a chance to establish a connection. Here was an opportunity to learn by mingling with the actual people over there.
"You can go hear the briefings and go on the tours, but unless you get some one-on-one quality time with companies, something's missing," she continues. "You can then appreciate the people, understand the culture, and understand their way of doing business. Culture is a huge issue, most people that had been on this trip had never been to Asia."
The third part was the plant tours, which Anderson notes were outstanding. "One thing that came out of the group after we toured a number of facilities is the importance of benchmarking globally," she says. "In this global economy, it is truly something companies need to explore on a regular basis - to be able to check your best practices against other company's best practices and see how you can match around the globe to improve the way your company does business."
Meinert felt the shops were professionally run and very businesslike. "The average mold shop here employs around 25 people vs. hundreds of people over there," he notes. "Yet, they are still professionally managed and run. It was nice to see that level of sophistication; some were surprised by it."
The group also was able to tour some educational facilities. "The facilities in Hong Kong and Singapore showed what we're lacking here," Anderson says. "It made us see that if they are not yet 100 percent competitive with us, they will be soon because they have an infrastructure in place for training that is state-of-the-art. It's a complete cooperative effort among business, the government and the training centers. They have made training a priority and it's something we can learn from."
Knowledge is Power
Seventeenth century writer/poet Francis Bacon may have been the first to say it, but the trade mission participants can practice what Bacon preached as they apply what they learned abroad to their own businesses. At the end of the trip, Anderson organized what she called a takeaway session, and the group formulated everything they would "take away" from the mission - what they would remember and what they would do to strategize (see Sidebar at the end of the article).
"Rule number one always is know thy competition and use this information to put together your own strategy," Starkey comments. "We were really able to understand the moldmakers in these regions and in the end, the participants felt really positive and excited about coming back to their businesses and putting together their strategies and specialties. I don't believe that anyone returned home and put a 'For Sale' sign up in front of their shop. The bottom-line mood of the group as we were wrapping up was very optimistic, very positive - they will be able to execute their strategies with more confidence. The mission completely met our objectives and also gave us a handle on our competitive advantages as U.S. mold builders."
Meinert concurs, adding, "We learned that we need to use our location as an advantage," he states. "We are so close to the customer here, right in the middle of the world's largest market, and we need to learn to benefit from that."
The participants also were impressed with the time-to-market of their foreign counterparts. "Often, they would have engineers in their customer's plants helping them design products because 70 percent of a product's manufacturing costs are determined upfront in the initial design stages," Meinert comments. "It seems like they make a real effort to get involved early and to compress time. The guys heard several (of them) mention the importance of multinational marketing. Our country is full of multinational companies that have plants everywhere - you just can't have a single point of contact anymore. It's nice to go to where the decision-making is but it's also nice to go to Brazil, Mexico, Asia - wherever the company has these multinational locations."
According to Anderson, another lesson learned was that the U.S. moldmaking industry needs government support. "The level of government commitment needs to increase with regard to training and travel," she states. "For example, at our last dinner in Singapore, we were sitting with three members of the trade association there talking about the mechanics of the trade mission. We found out that whenever anyone in Singapore travels on business, the government reimburses 30 percent of all of his or her expenses. Their lifeblood is international travel; you cannot travel in Singapore without travelling internationally. Let's compare this to our mission: the U.S. government charged us for the mission, we had to pay them for their services. They did them well, I'm not taking that away from them, but it's a difference in philosophy."
Equipped with a wealth of knowledge from this eye-opening mission, the participants are now ready to face the future and all of the challenges conducting business in this new millennium will bring. "Everyone knows what they have to do and how to go about it," Starkey says. "We put a lot of time and work into this for really good reasons: we need to get the word out so U.S. mold builders are more competitive-minded and more knowledgeable."