If you’re serious about competing with low-wage countries, one of the things you have to think about is building a sustainable competitive advantage. The word “sustainable” has come to be associated with environmental issues, but that’s not what I’m talking about right now. I’m talking about an advantage your competitor (or potential competitor) can’t take away from you by building a new factory, buying new CNC machines, or finding some other way to match what you have to offer. An advantage you can sustain over time.
Response time to customers’ needs is an area where
In addition to pure logistical issues, communication with a far-flung supply chain is slow and not always perfect, introducing more opportunities for delay.
So, what does it take to win with speed? A couple of companies I’ve been keeping an eye on would identify three areas: automation, flexibility, and the will to move fast.
R&R engineering of Summitville, Indiana, manufactures bent bolts. These are items that are at the low end of the value chain, and arguably an attractive target for companies in low-wage countries to produce. But R&R keeps roughly 3.5 million pounds of steel in stock on a continuing basis, and a result can often ship orders on a same day basis. The company has also invested heavily in machinery to speed throughput. The result: They almost never lose an order to
Signicast, a maker of investment castings shares these same attributes. Founded in 1959, automation has always been the number one focus of the company, specifically for the purpose of being able to deliver quickly. “Speed is everything, and it’s one thing that China can never do,” said Todd McDonald, VP of sales in a recent interview with Small Business Times.
Obviously, quality and price figure into the competitive equation, and these two companies are clearly no slouches in either department. But, let’s be honest, other companies in other parts of the world can achieve high quality… and many will have a built-in price advantage. But they will never be able to win on speed.