The mold and die marketplace has entered a new era called the industrial evolution. It is an era that requires adaptation toward a business model composed of three elements in order to be successful: investment in new technology, modern training and new business practices.
This era is a continuous transition of enhanced innovation and precision manufacturing from a previous era of high-volume, low value production. The future of this industrial evolution is now.
Capacity Versus Capability
Investing in technologically advanced equipment is vital to survival in a global marketplace. Whether or not you do business internationally, you need to understand that you are in a global marketplace.
Many companies look out on their shop floor and lament that they cannot justify investing in such new equipment because their current machinery is not running at capacity. Capacity is not the issue; capability is. You can no longer measure your business strength from such items as backlog. As we are now truly in a JIT environment, backlogs have become measures of inefficiency, not success.
With more OEM and tier-level suppliers demanding superior quality and finishes, quicker turnaround times and lower costs, shops must work smarter, not harder. This means gaining performance, hours and dollars from unattended machining time, automated operations and faster metal removal operations. You are simply not going to secure work, produce it in a quality fashion nor perform the machining operations to shortening just-in-time demands with 10-year-old machining centers. Even five-year-old equipment puts you at a significant disadvantage to machines with significantly advanced operational capabilities.
Invest in capability.
However, investment in capability alone is not enough. If you believe in the old adage, "you can't teach an old dog new tricks," you are already defeated. You need to learn new tricks, and teach your employees to embrace them; this requires a cultural paradigm shift.
The training on new equipment and on process changes within your operation is key to successfully improving your market position and achieving full use of equipment technology. You must train your people on new techniques in high-speed, high-performance machining. Concurrently, you have to challenge and streamline your existing processes in order to lower your costs and shorten leadtimes. Global competition may be able to erode your quality of services on price factors alone; you need to relearn how to compete.
Achieving superior quality, saving resources through reducing cycle times and time-to-market and providing better service to your customers requires learning some new tricks.
No matter how inexpensive foreign production and competitive costs may be, you can remain competitive on service.
In order to compete in a global arena, your ability to reach ISO and QS quality procedures and standards is a must. A typical rule of thumb is that you need to invest 5 to 7 percent of your time, as well as the time of your employees, reviewing current management practices and learning new ideas.
You most likely cannot compete globally on cost, but by getting to better know the needs of your customers and servicing them better, you can become more valuable. Survey them; talk to them. Most importantly, integrate your processes to align with their needs.
These are some ways that your operation can generate a superior output demanded by customers, including by leveraging toolmaker and operations talent. This alone may not allow you to immediately dominate the marketplace.
The bottom line: If you don't service your customers, someone else will.
If you are still solely serving companies within a short driving distance of your shop, you are missing out on a place in the expanding global marketplace and you may want to seriously review your business practices.
Every company in the mold and die industry is striving for success against a growing global market. Corporations, plants and tool shops have to change their processes not only for immediate and future business survival, but also to further enhance their role in this expanding arena.
This global marketplace is demanding that performance. Find a niche within the marketplace that gives you a competitive advantage, whether it is in high-precision, prototyping or micromanufacturing. Find anything that shortens your leadtimes and production development, and allows you to differentiate your operation.
Furthermore, there is even greater upside potential; currently, less than 2 percent of North American companies export products. While domestic consumption takes up a lot of moldmaking capacity, overseas manufacturers continue to make investments in and look for suppliers from North America.
You can either be a victim or a victimizer in this global arena with your business practices. Understanding and applying these concepts will allow you to remain globally competitive in the industrial evolution. The choice is yours.