Letter Box.

Offshore Competition is More Viable Than You Think

I have been in sales and sales management for over 20 years and have worked for several major players in the cast iron industry. Over those years, I have listened to my superiors gripe and complain about our customers moving their cast iron purchases to offshore sources due to lower prices. In every instance, they have always thrown in the part about our customers not caring about the quality of the parts any more and how they are interested only in the price.

What has made us so arrogant over the years to make us think that we are the only metalcasters in the world that can make quality parts? How have we changed the meaning of "quality" to mean "something that offshore casters cannot possibly produce?"

Well, it's time for us to wake up. Other countries do produce quality parts-- just ask our customers. And some of them are doing it at much lower prices. It doesn't matter whether they are being subsidized or are selling at their cost or below--the fact is they are starting to beat us at our own game. Worst of all, our most common response seems to be that "they can't make quality parts."

What determines a "quality" part? Our customers' requirements do, that's what! It isn't how good we think they look, or how dimensionally accurate they are or how nicely they machine. It's the customers' perception of:

* does the part meet the specs?

* is the part cosmetically acceptable?

* did it arrive on time?

* did I get the best price I could for a good part?

The unfortunate thing for us is that the answers to the above questions is a resounding "YES" and until we accept that fact, we are fooling only ourselves.

We must accept the fact that we are facing some viable competition and until we accept that fact, the stomping is going to get worse. Telling our customers that they will never get quality parts isn't going to mean anything if they are cutting chips on those parts and putting good product out the door at lower costs than when they were using our castings.

The problem we are facing is costs and prices. It is true that we are not playing on a level playing field when we talk about costs. The countries that are taking our business don't have the stringent environmental requirements or the minimum wage issue, and some even have government subsidies and other advantages--these are our true problems.

At some point we have to quit the griping and finger-pointing and do something about it, or we will have an awful lot of time on our hands to do a lot more finger-pointing.

Larry Z. Harvey

Sales and Marketing Manager

St. Marys Foundry

St. Marys, Ohio