Article submitted by Bank of America For mid-market companies, business success and responsible growth aren’t mutually exclusive. In fact, prioritizing responsible growth is becoming increasingly important, and successful companies are making sustainability central to their growth strategies. Beyond good corporate citizenship, they are recognizing the intrinsic link between the strength of their business and that of the communities and economies in which they operate. Leading your growth with those goals in mind builds resilience and better solutions for the future. Consider the following: Responsible growth companies perform better. Companies that consider the impact of risks and opportunities on the environment, local communities and society may produce better financial results than those that don’t. Additionally, 90% of companies believe a sustainability plan is important for remaining competitive. Responsible growth companies attract investment. A 2016 study by MIT Sloan Management Review and Boston Consulting Group surveyed 3,000 executives and managers from more than 100 countries. Findings revealed that 75% of senior executives in investment firms agree that a company’s sustainability performance is materially important to their investment decisions, and nearly half would not invest in a company with a poor sustainability record. Ninety percent of executives see sustainability as important, but only
Competitiveness can be a positive thing. It inspires companies of all sizes to innovate and improve over time, and the constant push to do better can lead to some creative, outstanding results. However, because most markets are growing increasingly competitive, it’s getting harder to sort excellent goods and services from the rest, leaving a lot of voices drowned out by the noise. In the end, it all goes back to showing what you know, and adopting thought leadership as a key part of your strategy is key to distinguishing yourself from your competitors. Many think thought leadership is just a marketing ploy, but manufacturing companies stand to earn many long-term benefits by posting blogs and other pieces of content that draw back to your expertise. Even if you’re in a niche market, demonstrating awareness of what’s going on in your industry/sector goes a long way; in fact, 93 percent of respondents in a 2016 Bloom Group study said high-quality thought leadership content improves their opinion of the company producing it (while 94 percent also pointed out that poor or no content lowers their perception). But what can you do to ensure the content has good return-on-investment and gets you more
Do customers consider your products commodities? Nearly two-thirds of companies report that their products or services have fallen into commodity traps, as customers assume that there’s little or no difference between vendors. This puts tremendous pressure on pricing - with both customers and suppliers - a third of manufacturers find themselves stuck in price-centric, buy-and-sell relationships with customers (an even higher percentage of SMEs are stuck). Unfortunately, commodity-based, transactional relationships almost always lead to limited bargaining power and low margins. According to marketing expert Andrew Thomas of the University of Akron, current marketing and distribution notions have wrongly convinced thousands of U.S. innovators that the sale and distribution of their products and services is better left in the hands of outside forces. But there's good news: breaking out of the commodity trap can re-energize your organization — and your profits. In doing this, focus on three commodity-trap escape routes: Innovate: If competitors copy your products, make your own versions obsolete. Few products retain popularity forever (Twinkies excepted). Nothing drives new margins like new products. Differentiate: Add value to existing products — via enhanced service and support, embedded intelligence, extended warranties, etc. — that distinguishes your offerings from those of competitors.
Many manufacturers would never think of selling their companies. They may be sustaining a family tradition, or looking to build one for future generations. But for some of these leaders, an opportunity to sell will appear anyway — especially for manufacturers with strong financials, solid customer bases, and innovative products. Unfortunately, the “I-will-never-sell” mindset can leave owners flattered but flustered when a buyer knocks on the door. Because they’ve never considered an exit, they haven’t prepared their companies for merger and acquisition (M&A) activity. This is a critical mistake, as selling and planning is a process in its own right, and many things take place before the actual sale. Preparedness can (1) identify if a sale is the right choice and (2) prepare the company to attract the right price. Yet just half of SMEs seek outside experts for strategic planning in readying their companies for M&A. Here’s how to get started now: Assume a sale is possible: Every manufacturer owner should know the value of his or her organization to others — in part, to review the organization’s current strengths and weaknesses. Kicking the tires on your own company can open your eyes, stimulate innovation, and can lead to
It’s been more than a quarter-century since The Machine that Changed the World was published, in which Jim Womack and colleagues presented the Toyota Production System (TPS) and lean thinking to the Western world. A strong majority of manufacturers have adopted this methodology, and its principles have since spread from production to all functions (front office, finance, R&D, etc.) as well as to healthcare and other service industries. Some manufacturers have flourished within new lean cultures. But many other firms — maybe yours — have achieved some results from their lean efforts, but perhaps not as much as they had hoped. Or maybe your company is among the one-third of manufacturers not yet using lean or TPS. Whichever describes your organization, it’s time to take a new look at lean — and at five keys to implementation that will make lean work for you: Embed lean in your organization’s DNA: Lean isn’t about tools or techniques, but about changing how you think. Truly lean manufacturers have workforces — from the CEO to the janitor — in which every employee looks for problems (not blame), thinks about how to fix them, and then solves them. It’s critical that a leader (i.e.,
We hear it all the time: Manufacturers can’t find machine operators, maintenance staff, frontline workers, tool-and-die makers, etc. National statistics support these claims: the cumulative skills gap in manufacturing — positions that will go unfilled due to a lack of skilled workers — will grow to 2 million by 2025, according to Deloitte and The Manufacturing Institute. What’s a growing company to do? First: relax. It’s important to remember that macro trends don’t necessarily determine micro (i.e., company-specific) results. In fact, a closer look at plant-specific data suggests that engaged leaders can find the talent they need — if they know how to attract and retain it. It turns out that many skills gaps are self-inflicted by companies that offer uncompetitive wages, limited opportunities for career growth, and unsatisfactory work conditions. For example, many plants don’t offer common employee benefits and programs, such as paid vacation days, paid medical benefits, a formal safety/health program, or paid sick and/or personal days. In fact, only 53 percent of manufacturing plants offer all four of those programs. Who wants to work at the other 47 percent? HR Practices and Programs in Place % of plants Paid vacation days 86% Paid medical benefits
There is no “Perfect Business Model”. While this may seem like common sense, there are still a great deal of startup companies trying to approach their business with a “cookie cutter” approach. Company founders go through the process of developing a plan by assessing the opportunity, applying the problem to the assumed solution, and developing a five-year business forecast with information that is unsubstantiated and quite frankly, unknown. Recent studies show how customer-first methods are able to revolutionize the process, dramatically reducing the failure rate of startup organizations. In an article published in the Harvard Business Review, professor and principal investigator Steve Blank explored the merits of the “Lean Start-up” approach. The first contrast of the Lean Start-up approach regards the development of a framework. Using a template known as the Business Model Canvas developed by Alexander Osterwalder and Yves Pigneur, entrepreneurs are able to understand the building blocks to their organization, including categories such as Value Proposition, Customer Segments, Key Resources, and Key Partners. The business model canvas allows you to develop relationships within your building blocks, understanding the most successful approach to presenting your start-up. These approaches can be resource-driven, customer-driven, offer-driven or finance-driven as explained by Osterwalder.
A shortage of skilled workers to fill current vacancies and the growing skills gap in the manufacturing workforce is becoming one of the most pressing problems facing manufacturers. Whether it is a new product, increased sales, or more innovative equipment, employers are seeking talent for the changing manufacturing landscape. Finding a pool of potential candidates with the necessary knowledge and skills can be a daunting task. Employers frequently voice their frustration and dissatisfaction with the caliber of individuals seeking manufacturing positions. Finding individuals who can quickly master the needed skills and who fit into the company’s culture can be frustrating. Upskilling current workers is one strategy that companies are starting to consider as a way to get the needed qualified workforce. Incumbent worker training, whether delivered at the company or at an educational institution, can be the short-term solution. Current employees have already demonstrated their ability to do the work and fit into the company’s culture. Providing them an opportunity for training is often a welcome benefit that can lead to promotions and employee retention. Partnering with a local community college or university can provide easy access to quality instruction that can be adapted to meet the company’s needs.
As companies enter the new calendar year, many will be faced with workforce challenges. Some will be seeking new employees to fill vacancies created by the retiring baby boomers; others will be looking for employees with skills to meet the changing demands brought on by new technologies or production of new, more complex products. Regardless of the need, solutions will be more difficult due to a smaller pool of candidates with the necessary knowledge and skills. Recent articles and research reports are suggesting that companies need to step up and become part of the solution. After all, complaining and blaming others will not lead to a skilled workforce. MAGNET is partnering with employers and educators to develop and implement strategies to address current and future manufacturing talent needs. One of the most successful approaches is an internship program offered by a local career-technical school, college, or university. Employers are finding that interns not only bring new perspectives and energy to their workforce, but they also may become the new employee needed to fill a vacancy. Students in technical training programs are prepared to work in skilled production positions and become contributors more quickly and often with less on-the-job training than
The Ohio Manufacturing Extension Program Partnership (MEP) has introduced a new program intended to help high school students find internships - and potential careers - in local manufacturing. The MEP internship program is modeled on a work-based learning program created by MAGNET, and has been adopted by the entire state. The program is based on the premise that high school students have developed skills during career technical programs and can still develop these skills while in high school. Students are provided with the opportunity to apply these skills in real-world settings and to show manufacturers the value of offering students these opportunities and the value of providing on-the-job learning. MAGNET MEP Internship MAGNET Polaris Internship "It’s a great opportunity for schools and manufacturers to take a proactive role in developing a highly skilled manufacturing workforce for now and the future," said Judith Crocker, Director of Workforce and Talent Development at MAGNET. The Manufacturing Extension Project reimburses part of the wages paid to the students by the manufacturing during the internship, and over 70 percent of students engaged in the programs were hired after the internship.