The 3 C's: let's not give away our most precious resource: time.
Just about everyone I know in our industry (and the larger world of manufacturing) could not wait to kiss 2003 goodbye. The economy was terrible, competition brutal, and technology evermore complex. Maybe--and the jury is still out on this--the economy is finally on the mend. Capacity appears to be tightening, at least a little. Spot shortages of some raw materials have suppliers rattling the saber called "price increases" and talk is that the worst is over and things are finally returning to "normal."
But, can we really afford a return to normal? Maybe it was the prevalent thinking back when things were "normal" that contributed to the havoc of the past couple years. (By "normal" I mean the days of thinking that all we need to do is sit and wait for orders to stream in, that life is good and always will be.)
It's not that the economy is good; it's just better than terrible. Competition is still brutal and advanced technology--and all the issues involved with designing, fabricating and assembling those new technologies--is escalating. So maybe, just maybe, we need to rethink what we want "normal" to look like. What's going to make this year different? Or, more to the point, what are you going to do to make this year different, from last year and the ones before?
Boiled down to the basics, it all comes to the three C's--customers, capability and capacity. Now is not the time to get cocky and forget about taking care of your customers. One of the easiest and most important differentiators is how well you service customers. A key value-add opportunity is to be a valued partner with customers. But some companies forget this, especially when times are good. It's outstanding customer service that provides the opportunity to increase sales and margins.
Back when things were "normal" many in our industry did not treat customers well. Service and product quality were questionable, and customers were treated like competition. Not everyone operated this way, but enough of the industry did to provide the opportunity for companies located around the world to get in and penetrate longstanding local accounts. The result is that in many cases we are now the ones outside looking to get back in. Service is intangible, but when offered and provided consistently and at the highest levels, it results in a desirable tangible--profits. This time around, let's not forget the value of service but instead elevate it to new heights.
One of the most consistent aspects of our industry--through good times and bad--is the rate of product development and the ferocious appetite for new technology. Many have survived by focusing on providing prototypes to leading-edge technology companies. This requires capability and continual improvement/expansion of those capabilities. Buying equipment is not the only way to expand a company's capability; by training and developing employees they can use their creativity to propel your technological base. Without enhanced capability it is impossible to participate in a technology industry.
The problem is that enhancing capability does not mean doing everything for everyone. All companies--because of size or staff--have a primary niche, a sweet spot. Building capability around that sweet spot, to preserve and expand on the core competence of the business, must be done continually. This is not the same as acting like an ambulance chaser and making product just because the order is "there." Indeed, that most likely reduces your capability by pulling too many resources away from what you do well, to the point that you wind up doing nothing well. A capability plan--a technology roadmap--should be followed and updated faithfully. Don't purchase a piece of equipment or add a capability just "because." Capability expansion should be planned, i.e., as part of a strategic plan and not an emotional reaction.
Which leads us to capacity. In North America there is a lot less capacity today than a couple of years ago. When capacity begins to be consumed two things can happen--lead times stretch and prices go up. In the good old "norreal" days we as an industry sure did a great job with the former - with some lead times pushed as far out as 30 weeks. Problem is, we did nothing regarding the latter. This time, let's not give it away. What is "it" exactly? Our most precious resource: time! We have only so much capacity--time --available. Our customers and primary suppliers know that, and they are not shy about increasing prices when their capacity is drained. So, maybe if--and it still is an "if"--the economy does perk up this year we should all remember that capacity is time and we need to price our time appropriate to demand.
I don't think we can financially or emotionally handle another year like the past one! We learned a few unpleasant lessons, the most important being: Complacency means someone else will come in and take your business right from under your nose. This time, let's be proactive, take what we have learned and firmly establish a new and higher level |or our companies and our industry.
PETER BIGELOW is president and CEO of IMI (imipcb.com). He can be reached at email@example.com.
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|Publication:||Printed Circuit Design & Manufacture|
|Date:||Feb 1, 2004|
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