Strategy trends: Mid-size companies can lead the way
by Keith Mullan
Today’s marketplace is characterised by increased competitive pressure and rapid change. But the situation should be seen as an opportunity – especially for mid-sized manufacturers.
The market is ripe with opportunity for companies that are capable of responding swiftly to changing market conditions, and market pressure plays right into the hands of the mid-market. In a down economy, competitors will be looking inwards rather than exploiting new markets. Many mid-size manufacturers sell products that aren’t that expensive nor complex, which provides them with great opportunities if they play it smart.
To do this, companies need to gain control. They need greater visibility in order to find waste in their business processes. They need to be alert to customer’s needs, be aware when materials aren’t going to be available as originally planned, and measure where they’re making the greatest profit. In short, they need to manage their supply chain more efficiently.
While the Internet has served as a technological foundation for gaining greater visibility, it’s also one of the main catalysts for increased competitiveness in the market. The irony is that while e-business is making it easier to increase efficiency, at the same time it’s raising customer expectations and eroding traditional competitive advantages.
Before the Internet, it was difficult to compare prices against other suppliers so the customer often ended up paying more. On the web, however, it’s easy to look elsewhere, which means there’s increased pressure from end customers. The Internet gives them greater choice and greater visibility.
Customers want unique products and expect individual service. Consequently, they are less willing to accept mass-marketing and one-size-fits-all products. This means that manufacturers must adopt the make-to-order mentality to supply customised products and services designed to match individual customer profiles. The customer puts pressure on their supplier, and they in turn put pressure on their vendors’ suppliers.
Mid-size companies have the size and structure necessary to deliver the products that customers want with minimum time to market, and have the potential to reorganise in order to seize new opportunities. It requires, however, that they are geared for change and that they have a business solution that supports maximum efficiency of business processes. While technology can help increase visibility and sharpen competitive edge, it is wise to focus first and foremost on business processes. Technology can then be applied gradually as a means of achieving more business value throughout the supply chain.
Supply chain management is not just about moving product components. It’s everything we do, from the conception of products to their obsolescence. Everything that makes time-to-market or time-to-return on product as efficient as possible.
It’s always been healthy business to improve the processes that add value to your partners and customers. In today’s rapid and competitive market, it’s absolutely crucial to a manufacturer’s success.
Keith Mullan is managing director of Navision South Africa, a global provider of integrated business solutions. Visit their web site at http://www.navision.co.za or phone them on +27 11 315 2000