Analyzing an industry SWOT.

Has your firm ever performed a SWOT analysis? You know, analyzed its strengths, weaknesses, opportunities and threats?

I am a big believer in an annual self-analysis to put your arms around where you and your competition stand. But the key to these efforts lies in your ability to be honest. Can you take a step back and look at your firm without those rose-colored glasses?

I went through this exercise recently, focusing my SWOT on the U.S. metalcasting industry. While I was asked to perform this SWOT based on my initial gut reactions, I think the results are fair and true.

* Strengths--manufacturing engineering skills, raw material availability, communication skills, technology development, annually increasing productivity.

* Weaknesses--labor rates, regulatory burden, industry perception, shrinking industry size (plants/ people), new technology adoption, complacency, fixation on production over profit.

* Opportunities--conversions to castings, exports, strategic alliances and joint ventures, machining, casting design, increased education of customer base, close proximity to customer base, communication compatibility with customers, rapid prototyping/time to market.

* Threats--foreign competition, plastics and other non-metal processes, powdered metals, fabrications, forgings, the industry's reactive rather than proactive nature.

First, let's focus on the lack of compatibility between our strengths and opportunities. We are the global leaders at manufacturing every type of casting imaginable in every metal and for every end-use industry. However, the growth opportunities before our industry relate to customer relationships, marketing, and strategic planning and partnering--issues that are focused on adding value to our firm's services and products beyond casting manufacturing.

Through my discussions with metalcasters, I have heard first-hand how difficult it is to embrace the concept of adding value to our castings. Customers are asking metalcasters to step outside of their comfort zones into areas of manufacturing, supply-chain management, strategic partnerships and geography that we know little if anything about. I can hear the screams, "Why can't we stick to what we are good at--casting manufacturing?"

The problem is that our customers demand more. The future growth for many in our industry will only come if we seize these opportunities to add value to our product. We must make the dramatic steps necessary to grow from casting manufacturers to engineered metal component and assembly suppliers.

Taking a look at the weaknesses and threats, the obvious correlation between U.S. labor rates and regulatory burden and the threat of foreign competition stands out. But a more revealing correlation is among the weaknesses of industry perception and new technology adoption and the threats of other component manufacturing industries such as plastics and fabrications.

Metalcasters are competing for the time of buyers. While we know every component should not be made as a casting, we want these customers to at least look to castings whenever the possibility exists. The only way this can happen is if the metalcasting industry is viewed as cutting-edge manufacturing that provides solutions. Today, metalcasting is viewed as an antiquated industry on its deathbed. Ask them about plastics, and you are likely to hear the words "cutting-edge manufacturing."

Will this change in image occur just because we implement the latest technology? No, but that would begin to help. We as an industry must begin to understand that our success and failure is tied as much to our current and potential customers' perception of us (and the resultant confidence from that perception) as it is to the reality of the industry. The daily sourcing decisions being made by buyers and designers for every component to be manufactured for the next generation of car, truck, plane, train, fork lift, gas turbine, etc. will affect our next five to ten years.

It is never easy to look at ourselves in the mirror and be honest. But this is the only way to achieve true growth.

Alfred T. Spada, Editor-in-chief

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