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A Formula for Success

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An article from earlier this year spells out a formula that Maryland-based manufacturers have employed to help themselves survive and grow through the recession and manufacturing's recent malaise.

Trim Costs + Embrace Technology & Improved Systems for Agility + Turn Away from Commodity Manufacturing = SUCCESS

From the article:

"... The company ... followed three critical tenets for manufacturing in 2009. Specifically, (the company) trimmed its operating costs through energy efficiency and recycling efforts, developed systems to respond quickly to customers' changing needs and focused on custom — not commodity — manufacturing."

The result? For one steel & wire manufacturer, investment in robotics and quality technology resulted in speed, accuracy and "crazy, tight tolerences" that differentiated him from all competition. He sats that the purchase of technology while the economy was tanking "was absolutely a contrarian thing to do and some people thought I should have been committed."

But by making these investments, the company was prepared to take on the most lucrative work - when someone needs it NOW.

"Nine times out of 10, when we see an order it's because everybody has waited until the last minute to sign off on the purchase and it's, ‘Oh, my God, we needed this yesterday.'"

Machined PartBut there's something critical that's missing in this equation, and that's recognizing what a commodity actually is these days. Take a look at the part in the photo. Would you say that's something that only you can make? There was a time when that might have been so - but relatively cheap technology now gives a 24-year-old with a journeyman's certificate the ability to upload a 3D file into a CAM program, set up, and hit the switch.

The fact is, there are likely many more people in your city, state and region that can do what you do than you know of. And that's commoditization.

Once you can rationally determine if your products and services are or are becoming commoditized, then the equation gets a bit easier.

Can you make this part?

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