Printer Friendly

Industry haves and have-nots.

In case you haven't noticed, the lose/lose competitive environment that defined the foundry industry for most the 1980s has changed dramatically in the past few years.

No, we haven't seen a big increase in casting demand. Neither is there a shortage of casting capacity--the foundry industry hasn't become a sellers' market. It's just that we are now operating in an industry where there are clear winners, which we call haves, and just-as-clear losers, the have-nots.

Today's win/lose competitive environment was brought about by forward-thinking companies which, over the last three to five years, stepped up to the plate and aggressively responded to changing customer demands and the new global competitive environment. These companies are the metalcasting industry's haves, and some of what they have are the following:

Innovative management. These foundries and foundry industry suppliers are implementing practical, leading-edge management techniques. Foremost among these are a flat organization structure, employee development and empowerment, total quality management, continuous improvement in both costs and quality, target account development programs and customer as well as vendor partnering.

Customer orientation. Their customer partnering includes recognition that customer needs are primary. They have a detailed knowledge of customer requirements and meet their customers more than halfway in quality, service and pricing. They train and motivate their employees to be truly customer oriented.

An unprecedented respect for and attention to developing human resources. The haves provide their employees with continuing education and training opportunities designed to improve job performance as well as to allow for personal and professional development.

A willingness and ability to invest in new technology. Success breeds success. These companies have identified and invested in new and emerging technologies that enhance their ability to compete in target markets. A good example is the considerable number of new flexible, high-speed molding machines that are on order for U.S. and Mexican foundries. This equipment generally replaces technology that is no longer suitable for the markets these foundries serve. As a result of staying in the forefront of available technology, the haves are becoming even more efficient and effective, and are continually taking business away from the rest of the industry.

Extensive service and support functions. Casting buyers are demanding more customer service, design assistance, field quality engineering and other expanded services. The haves have added to their staffs and systems to excel in meeting customers' new service requirements.

Growth and profitability. While points one through five would seem to indicate higher costs, these companies actually have some of the lowest costs in the industry, and are quite profitable and growing. They achieve this profitability by establishing a business focus--as defined by products and markets--then by managing their capacity, product mix, technology, customer mix, quality, services, costs and pricing to achieve market or market niche leadership and operate at increasing levels of profitability.

The Have-Nots

For those metalcasters and industry suppliers who are have-nots, time is running short. Today's haves are not providing a stationary target, but are rather continually looking for, finding and implementing new ideas to increase their competitive advantage. As a top manager at one have recently told us, "We realize that if we don't keep moving ahead, we will eventually be run over."

Every metalcasting CEO must honestly determine if his or her company is a have, a have-not or stuck somewhere in the middle. The best way to find your company's position on this continuum is to ask your most forward-thinking customers. Better yet, ask the most forward-thinking buyers in the end-use industries you serve. (It's probably a bad sign if those companies are not your customers.) Also, ask your management team and your employees. Listen carefully to all of their responses.

If you begin to suspect your company is a have-not, and you still have sufficient cash flow to stay afloat for awhile, all is not lost. The first thing you must do is get out into the marketplace again and visit all your major customers. Ask a lot of questions and, again, listen to the responses. What are your customers' true needs? How can you better satisfy those requirements? Are there needs or wants not being met by any supplier, and do these represent opportunities for your company? How can you help your customers, and your key contacts, to succeed in their competitive environment?

Meeting with your customers face to face and following frequently with additional visits, phone calls and letters will enable your foundry to develop the most important characteristic the haves have--a customer orientation. Such orientation is essential for success in today's, and tomorrow's, win/lose competitive environment, and it must always start with you--the CEO.

Once you are moving down the road toward true customer orientation, you can then lead your management team to develop the business direction, as well as the functional strategies and action plans, necessary to attain and maintain a have position. Those plans and programs should include all six of the imperatives listed above.

Through customer orientation, enlightened management and disciplined implementation of fact-based business plans, a have-not metalcaster or supplier can be transformed into a have. And only the haves will achieve growth and profitability in the metalcasting industry of the 1990s and beyond.
COPYRIGHT 1993 American Foundry Society, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:evaluation of foundries industry
Author:Gibson, Tom
Publication:Modern Casting
Date:Aug 1, 1993
Previous Article:Trends in foundry employment, hours and pay reported.
Next Article:Tensile test reproducibility of ductile iron.

Related Articles
1990 metalcasting forecast: solid performance for another year.
Strategy is not a dirty word.
The haves and the have-nots.
Keeping pace with technology: these African Americans keep up in step with emerging technologies.
Utilities: unexpected partners.
AFS Chapter Officers Conference.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters