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STRATEGIC PLANNING DIFFERENTIATES MANUFACTURERS

Planning to Succeed Who are your customers and are they profitable?
 Why do customers buy your product or service?
 Who competes with you for your customers’ time
and money?
 What are your strengths and weaknesses?
 What are the strengths and weaknesses of your competitors?
 What positive and negative business scenarios may impact your business and how will you deal with those circumstances?
 Is there substantial demand in a relatively untapped
corner of your market?
The list of areas to scrutinize when preparing the strategic plan is long, but remember, this is a marathon, not a sprint.

Is there a fire at your door?
Yes, and it’s not the kind of inferno that your local fire company can put out. Unless you know how to fight it, the heat generated from today’s manufacturing business climate can destroy your ability to succeed and move forward. The flames of competition, particularly foreign competition, are lapping at everyone’s bottom line.

But, how can you put out this fire? Manufacturers typically focus on the bottom line through initiatives like lean. However, rising costs and foreign competition have stretched the bottom line as low as it can go. Manufacturers now need to concentrate on top line growth. Competing solely on price is not a viable option.

The first step to making the shift from bottom to top line orientation requires another essential change. Manufacturers need to see themselves in a more strategic light, not just as manufacturers. On the surface, this may seem like an easy transition but a strategic focus may be new to some manufacturers. Still others have been stung by shallow, poorly implemented marketing strategies in the past. So, the transition to a strategic culture can encounter many hurdles from the very start. The evolution process must begin with executive or senior management buy-in. These top-level individuals need to be committed to solving the problems confronting their businesses through a long-term focus on the fundamentals of strategic planning.

Strategic planning is essential
Strategic planning has become essential to the manufacturing sector due to hyper-competition, communication overload and a changing marketplace, most notably globalization. The increase in the mobility of goods, services, labor, technology and capital throughout the world allows for competition from all over the globe.

Manufacturers today need to differentiate themselves from this competition. Even job shops can find points of difference between themselves and their competition.
Differentiation is one important tool that can reap tremendous rewards. Manufacturers can gain control of the bigger picture by establishing a long-term strategic planning culture throughout the organization. This is not a sprint, but a well-orchestrated, long-term marathon approach to success.

Manufacturers must also have a total understanding of the cost of products offered and determine which of those products are truly profitable. The old ideology of churning the same range of products or services year after year will be replaced with a differentiation strategy, the idea of creating and building customer-centered products or services. This innovation is not solely for new products, but is relevant to processes that yield higher productivity, lower costs and greater efficiency.

Organizations also need to be great at implementing once the strategy is developed. How many strategic plans have you seen gathering dust on an office shelf? Many times strong implementation is based on having a way to measure the value of strategies. Quantification is a key element to maintaining the organization’s focus on the strategic marathon.
Manufacturers can succeed in this new world economy. A manufacturer that uses the marathon approach to its marketing will maintain visibility while building credibility each and every step of the way. In the end, a marathon takes you farther than a sprint.

Barry Carbaugh is president of Barry Group, Inc. a strategic development and implementation organization specializing in strategies for competitive differentiation. Visit: info@barrygroup.com.

Volume:
9
Issue:
5
Year:
2006


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