Editor's Window30 Jun, 2004 By: Sara Ferris
What does it take to be successful? Finding (and keeping) some sort of competitive advantage, some reason why people want your products and services. Joe Greco, in the third installment of his excellent MCAD Tech Trends series on outsourcing, explored ways in which U.S. manufacturers can compete against offshore companies. If you can't compete on cost, where can you gain an edge? We'll look at a few ideas here, and a forum at www.cadalyst.com continues the discussion started in Joe's newsletter.
SolidWorks recently invited us to tour its customer Life Fitness, a Chicago-based manufacturer of exercise equipment such as treadmills, stationary bicycles, and elliptical trainers. The company has carved out an edge in quality. Every single unit is tested before it leaves the factory, and customer reject rate is around 1.5%, according to our tour host, plant process engineer Carlos Rios.
Innovation is another area. A recent study by PTC and the University of Aachen, in which 205 high-level executives at automotive manufacturers were interviewed about their practices, found that investment in research and development translates into greater revenue from new products. In turn, growth in revenue from new products is the mark of a financially successful company. A similar survey of industrial equipment manufacturers revealed that successful companies launched more new products and generated more revenue from each.
Technology can also provide an edge, whether it's a modeling program that lets you complete designs faster or a CAM program that optimizes machining or a visualization application that helps impress clients.
Of course it's easy to come up with ideas, but much harder to execute them. The PTC study found that successful and struggling manufacturers share the same strategies: grow market share, lower costs, improve ability to meet demand, and so forth. As Robert Green points out this month in CAD Manager (p. 37), vendors may dazzle you (or your bosses) with the potential payoff from their latest great technology. Throwing more money at R&D won't guarantee a pipeline full of blockbuster new products. Even outsourcing to cut costs can backfire if you're not prepared to manage that process.
Developing a competitive strategy is not just for the bigwigs in the boardroom. It doesn't hurt to assess your own competitive advantages once in a while, espeically if you fear your job may be sent elsewhere. What do you provide your employer that can't be found for a lower cost elsewhere? Robert Green makes the case for keeping up with current technology trends, even if you're not likely to be using them in the near future. Combine that knowledge with your familiarity with how things work at your company, and you can contribute to the successful execution of whatever strategy your employer adopts.
Joe Greco on outsourcing:
PTC industry benchmark studies: