No one wants to fail (most normal people at least), we want to be WINNERS! Sometimes, however failing can be a good thing. An unexpected failure may be an equally important source of an innovative opportunity, at least it was for Ford. In 1959 Ford introduced the Edsel to the market, a carefully designed car that would help Ford complete its product line, making it competitive with General Motors. Despite all the careful planning, market research, and design Ford put into the Edsel it completely bombed, sales were far below expectation. When analyzing the situation, Ford realized it had been segmenting its customers all wrong. Instead of segmenting them by income group, they should be segmented by their “lifestyle”. The new segmentation strategy resulted in a restructuring of how Ford produced cars. Seeing a need to appeal to the “Sports Guy” it soon designed and manufactured the Ford Mustang in 1962 and the rest is history! Have you ever turned an unexpected failure into an innovative opportunity? This story covers one source of innovation, “unexpected occurrences”. For more information on this topic check out the full article here: The Discipline of Innovation by Peter Drucker.
“The quality of an organization’s human resources is perhaps the leading indicator of its growth and sustainability. The attainment of a workplace with high-caliber employees starts with the selection of the right people for the right jobs.” Talent management is a business strategy that is reflective of an organization’s commitment to attract and retain the best talent throughout all levels of the organization. The potential impact on an organization can be huge when quality talent is aligned vs. misaligned with organizational need. A bad hire can cost a company as much as 5x’s that employee’s annual salary, depending on the type of job. “Zappos CEO, Tony Hsieh once estimated that his own bad hires have cost the company well over $100 million." Organizations with a high level of engagement report 21% higher profitability and 20% higher productivity (sales). A highly engaged employee has 40% fewer defects, 70% fewer safety incidents, 28% less waste, 41% less absenteeism, and 24% lower turnover in high-turnover organizations (Gallup). Gallup estimates 70 percent of employees are disengaged. A disengaged employee can cost an organization approximately $3.4K for every $10K in annual salary.3 Organizations with a culture of training and development show 13% stronger business results
On October 24th MAGNET teamed up with Brouse McDowell to host the first Manufacturing Executive Session at Brouse’s offices in Akron. The speaker for this session was Joe Kanfer, CEO of GOJO Industries, who delivered an amazing presentation on how GOJO successfully innovates. Joe laid out his 5 key ingredients for successful innovation: Drive out Fear Innovative companies develop a culture of confidence not fear. They reduce negative repercussions that come along with employees presenting new ideas and/or offering ways to improve things. Joe’s statement was “don’t get stuck in the middle”, don’t let fear paralyze you. In order to successfully innovate, get out from behind the computer, go visit your customers, stop making assumptions and start asking them the questions directly. Conduct Customer Research Innovation comes from understanding the work processes of your customers, knowing how they operate (ethnography), and delivering value by solving their problems. While you are “driving out fear” study the environment of your customers, investigate how your products are used, and look for other opportunities. Other opportunities will present themselves if you analyze your products before use or shortly after use. Watch Future Technology Trends Innovation doesn’t happen in a bubble. Technology is evolving fast,
In many cases, when one thinks of talent management, the focus is usually on leadership talent to ensure that the ‘right’ people are in place to ‘replace’ key leadership roles, which is also a component of your organization’s employee succession planning process. Talks of succession planning can also prompt owners of organizations to think about their legacy and the continuation of a business started many years before and grown out of hard work and many painstaking hours. Succession planning is also relevant to your workforce, in particular, where there are roles that are crucial to the organizations core business and unique processes. Your talent management systems and practices ensures successors are ready to step into key roles at all levels of the organization, when needed. Talent management is the process of identifying and preparing your highly skilled and talented leaders and workers to meet the organization’s business objectives. It is the process that ensures that the organization has the right talent acquisition plan and development approach to prepare its new and incumbent workers to fill each key role within your company as the need arises. It is also a critical consideration for jobs that require a unique set of skills
Finding quality talent is challenging…retaining quality talent is equally challenging It goes without saying, that many manufacturers are challenged with attracting and retaining the ‘quality’ talent needed to execute its strategic objectives. Is this the case for your organization? Significant workforce factors that may be affecting organizations like yours include: Shifting workforce demographics (multiple generations in the workplace) Pending retirement of your highly skilled workforce (i.e. baby boomers) Shortfall of skilled leaders and workers needed to execute your organizations’ business goals Significant gaps in skill sets that are core to your business’ success MAGNET’s 2017 Northeast Ohio Manufacturing Survey, conducted in partnership with The Corporate University at Kent State University – Stark Campus cites additional concerns from our local manufacturers: 80% of the respondents find hiring qualified workers difficult to very difficult. A lack of required skills or educations was mentioned as one of the primary reasons by 39.5% of the respondents. 58% of respondents find attracting and retaining qualified workers to be a major issue. Manufacturers are also struggling with a rate of employee turnover ranging from 5% to 10% annually. Each of these factors have direct implications for how well your organization is position to execute its strategic
During the early 1930s, IBM developed the first modern accounting machine designed for the financial sector. However, the banks weren’t buying the IBM machines; in fact, they were just trying to stay in business, and no one was investing in new equipment. The accounting technology was new, and people didn’t understand its potential yet (thus a reluctance to invest in it). Even with this dismal outlook, IBM found an unexpected solution: libraries. Unlike the banks, libraries during the early days of the New Deal era had money to invest. After the famed New York Public Library bought an accounting machine, others followed suit, leading to more than 100 purchases by libraries across the country. Once the economy regained momentum after World War II, the business community once again had the money to invest and recognized the sheer importance of computing technology. IBM redesigned their machines to help companies complete their payroll, and within a few years, IBM became a leader in the computer industry. Have you ever experienced an unexpected occurrence similar to IBM? Was in how the product was made or how the product was sold to the market? This story covers one source of innovation known as “unexpected
The market for plastics and resins continues to be somewhat confusing, operating under very different market conditions as compared to other raw material commodities. Though resin producers have learned the value of managing capacity to stabilize (and potentially to increase margins), the way they’ve been building up inventories is puzzling, even in the face of steady and increasing demand. The fact that producers were pushing for price increases as of August indicates that they anticipate increasing demand, decreasing capacity, or a combination of both, and have some confidence of realizing higher prices for their products. After Hurricane Harvey, demands for increased pricing have only strengthened as stockpiles are drawn down and infrastructure restarts are slower than hoped for. What can you do to keep up with these continually changing trends? Be responsible for your own defense. The best defense for a small manufacturer is to have multiple sources of resin pre-validated in your manufacturing process and pre-approved by your customers. This allows you to seamlessly shift from one supplier to another if faced with an unpalatable pricing demand. Be prepared to play suppliers against each other to ensure they remain in a reasonable margin band as market conditions vary, and
For the past few years, manufacturers have enjoyed declining and advantageous input costs on most commodity industrial metals – copper, zinc, aluminum, iron, tin, steel, etc. The party has most definitely come to an end. As the global economy heats up, demand for industrial metals to supply the manufacturing sector in all markets likewise increases, resulting in a steady upward pressure on raw material input costs. Barring another major economic or geopolitical crisis, we have likely seen the last of a softening commodity market for quite a while, and must prepare for a period of increasing cost pressures. Manufacturers in the USA, particularly small manufacturing enterprises, need to be aware and be taking proactive steps to prevent margin erosion due to negative purchase price variance resulting from these commodity pressures. Know what your metal purchases should cost - be better informed than the salesman across the table from you. Hopefully as a manufacturer you haven’t been a passive, price-taking buyer, or a seller allowing larger customers to dictate how material cost inputs are to be dealt with. Hopefully, you already have indexing agreements in place with both suppliers and customers. Most importantly with suppliers, because without such agreements you have
Do you like manufacturing, food, and football? Sign up for the 6th Annual Northeast Ohio Manufacturing Symposium! Presented by MAGNET and Cleveland Engineering Society, this for-manufacturers-by-manufacturers event takes place on Friday, September 29th and features a valuable keynote from Ben Marker (General Manager, Riddell). Also available are several best-practice sessions on essential topics for today’s companies, including cybersecurity, talent development, market diversification, product development, and operations excellence. Attendees will also have the opportunity to… • Meet former Cleveland Browns defensive back Felix Wright • Win an official Cleveland Browns football helmet • Talk to peers from companies like Bettcher Industries, Sauder, M-7 Technologies, LEFCO Worthington, and more • Tour the new, state-of-the-art Riddell facility in North Ridgeville • And more! Kick off Manufacturing Month by joining us for the best manufacturing event the region has to offer! REGISTER TODAY! For more details, contact Linda Barita at 216.391.7766 or email firstname.lastname@example.org.
On the heels of Hurricane Harvey, and as we prepared for Irma, another storm was announced on Sept. 7th, this one a financial typhoon. To make matters worse, this particular tempest was actually discovered way back in early July, and could have begun as early as mid-May. Hackers hit Equifax, the oldest of the three largest credit reporting agencies that gather and maintain financial and personal information on hundreds of millions of consumers, and tens of millions of businesses worldwide. The fact credit reporting agencies monitor consumers is broadly known, but people tend not to consider these agencies’ role monitoring businesses. Though it will be more challenging for hackers to make hay with stolen business information, the fact they now have enough personal information on up to 143 million Americans to easily commit identity theft on an unheard-of scale certainly gives one pause. It doesn’t beggar the imagination to envision some enterprising young hacker cross-referencing troves of stolen consumer and business data to see if there might be anything else interesting to exploit. What might this mean to a worried executive? For a large business, likely somewhat little, so long as they keep a weather eye carefully trained on their