Strategies for surviving the globalization hurricane

Globalization. It's a word we hear everywhere in business, yet for many, deciding just how global to be is a dilemma. Many molders want to be a part of the worldwide marketplace, but at the same time they fear what the global market may do to domestic manufacturing in the U.S. Molders and moldmakers fear the loss of U.S. manufacturing, their life's blood, as more and more OEM plants pop up in Mexico, Central and South America, and Asia. 

Now globalization is under way that encompasses both industrial and information markets. The industrial revolution in Latin America, Asia, and Eastern Europe is bringing these countries into the process, while the information revolution in advanced Western economies is pushing industry into other countries in a natural redistribution of the global division of labor. 

"Why is industry moving to countries like China?" asks Robert McGarvey of Beckett & Beckett Inc.—Canada (Edmonton, AB), a PR company that specializes in industrial companies. "Because they have the perfect system to accommodate this industrial revolution. We don't anymore." So how can molders and moldmakers survive the challenges of globalization? 

Survival Kit 
Too many people running today's manufacturing companies don't know what they do or how to capitalize on what it is they do well. "Has America become noncompetitive?" asks McGarvey. "Well, yes and no. Low-value manufacturing will naturally migrate to countries where there's accommodation for manufacturing. But America is good at innovation and will lead the world in developing the assets of the new economy." 

So, what do America's manufacturers need to do to avoid being swallowed up by globalization? First, says McGarvey, they must renew their commitment to excellence by attaining focus and differentiation, and surround themselves with the best people and advice. 

Secondly, they must learn to govern the new class of assets. "Management must learn to identify, value, capitalize, and manage intellectual property assets," he says. "Brand isn't goodwill, it's an IP asset. Use it well." 

Third, they must prepare for new, tougher business ethics. "Standards are rising, and management will be held to higher ethical standards, so be diligent about business practices," states McGarvey. 

Fourth, manufacturers must understand that the new economy is real and concentrate on cooperation and forging collaborative strategies with key supply partners and customers. They must also implement e-business strategies that are right for their situation. "Relationships are key to success. There's a need for a lot more cooperation," he says. "Don't be a supplier on one level of the organization. Be known at all levels to develop a strategic alliance." 

McGarvey also reassures molders that "volatility doesn't mean [the economy] is dead, it's just going through massive change." 

To take advantage of this information, U.S. manufacturers must create a "knowledge culture" within their organizations. The key to success in the future is rapidly converting knowledge, which is already in the organization, to products and services, and providing value to customers, says McGarvey. "Place customer creation first and shareholder value second. Know that shareholder value will come as the result of new customer creation." 

Finally, manufacturers must find new ways to make money. "We're not just going through a theoretical revolution," he adds. "What we make and how we make it and distribute it is key to success."