The Economy's Silver Lining
BY BOB KILL
Over the past couple months, I’ve received calls and e-mails from a wide variety of manufacturers statewide in response to my column, “A Bad Time for State’s Manufacturers?” (February 2008). The subject was a Creighton University supported study that reported record pessimism among Minnesota’s supply managers. A study that I believed contained many inaccuracies.
Judging from the responses, many readers agree with my conclusion. While no one denies that Minnesota is experiencing an economic slowdown, our small and mid-sized manufacturers remain quite hopeful about the future of our industry.
A couple readers recounted stories of how they’ve identified opportunities in the economy’s weaknesses. They’ve used the slumping value of the dollar to ramp up their export operation, or they’ve taken advantage of the market conditions to buy out competitors and grow market share.
One manufacturer told me that when he saw his competition backing away in the face of economic uncertainty, he accelerated his sales and marketing efforts, with excellent results. Others are looking at the slow down as a time to invest in their people and processes through training.
Savvy small and mid-sized Minnesota manufacturers are using this slow economy to tighten relationships with key customers. I recently read an article that said the luxury auto manufacturer Lexus gives most of the credit for its innovations to its suppliers. They long have had tight ties to their suppliers, all valued for their engineering and design innovation. Maybe OEMs are missing out on a great opportunity if they are not embracing their suppliers.
I think this says something about what is going on in manufacturing. If you have a tight relationship with your key customers, you’re going to provide a lot of innovation they may have thought of doing themselves a generation ago. It also speaks to the importance of building — and maintaining — trusted relationships, whether the market is up or down. Smart companies that have focused on building relationships are now finding themselves in a position to benefit during a recession.
To me, this represents a shift in mindset we don’t often read about. People recognize it’s going to be a little harder, but they have taken — and will continue to take — steps to become more efficient. This is especially true of the small to medium-sized companies that do not have the quarter-to-quarter focus many larger companies have.
So, it is a bad time…what are we going to do about it? Are we going to wring our hands, or are we going to take advantage of the opportunities? Those of you to whom I’ve talked are overwhelmingly looking to seize every opportunity this market presents.
The economy maybe in the doldrums, but for street-smart manufacturers, this is a time of great opportunity.
Bob Kill
President and CEO
Minnesota Technology, Inc.
bkill@mntech.org