From the Desk of Jack Healy, Viewpoints on the State of Manufacturing
Continuous Growth Improvement
In business conversations with a number of manufacturing executives it is a general concession that if they had not implemented Lean in their enterprises it would be unlikely that they would still be in business. All of the participants in the conversations made such a concession after realizing the resulting value that has been added to their respective enterprises as a result of applying Lean Technologies. All were still committed to principles and benefits of continuous improvement, and indeed continue to drive such initiatives within their organizations.
Lacking in all of the discussions were any plans being undertaken relative to Growth Strategies for the business. Growth Strategies could fill the excess production capacity that their organizations developed as a result of Lean initiatives. In one such discussion there was an admission, by the manager, that they now have an excess capacity of approximately 40 %, but that they were continuing to manage their business as if they were in a recession. Manufacturers who are waiting for their traditional lines of business with their existing customers to return to their former sales levels may have a very long wait. Given the current economic climate this may never happened.
There is a body of research that says that Operational Excellence usually provides a competitive advantage for a limited time. Unfortunately it has been a long standing practice for the majority of manufacturers to have a propensity to focus on operational improvement in order to deal with pricing and quality issues that precluded any real focus on growth improvement.
As we now enter what is termed a “new period of slow growth” this provides a real opportunity for any firm who wishes to survive to implement a Continuous Growth Strategy with the same leadership vigor that they implemented Lean. Economic Impact results for over 700 MassMEP manufacturing clients indicated that they increased and retained approximately $600 million dollars worth of sales in just the first year after initiating their respective continuous operational improvement engagements with us. Imagine what the results could be if these same seven hundred plus companies were to focus on specific Continuous Growth Strategy engagements.
Of course the biggest opportunity to support such growth is in the export area where sales have risen 40% faster than the standard economy since 2003.
Massachusetts State Export Summary (U.S. Census )
Year Total Exports (000’s) Exports to China (000’s)
2007 $25,351 $1,375
2008 $28,369 $1,563
2009 $23,593 $1,372
2010 $26,304 $2,194
As indicated in the above, Massachusetts exports have increased close to three billion dollars from 2009-2010 and Massachusetts manufacturing exports annualized for the first six months of 2011, project that manufacturing exports will be in the $30 billion dollar range for this year alone. We listed exports to China in the above table as they represent the fastest growing export sales opportunity increasing 60 % in 2010 over 2009.
For those who are interested in developing a Continuous Growth Strategy for their company utilizing exports, MassExport is now offering enrollment in Export Tec which will help individual companies develop an actionable export growth plan. The enrollment cost of $750 will allow any company to develop an export acceleration program specific to their needs.
Anyone interested can contact –Paula Murphy at [email protected]. Details and online registration will be posted on www.mass.gov/export in September”.
Anyone who may have a specific interest in exporting to China can take advantage of the Doing Business in China program being offered by the Worcester Business Journal, that will be held Double Tree Hotel , Westborough, Mass on Sept 21, 2011.
Anyone interested click here to register online or more information about the event.
