Small and Medium Manufacturers Speak Up, #3

By April 21, 2006Studies and Reports

Manufacturers are tuned into their customers today more than ever. Why is that?

To some extent, this closeness to the customer is a result of global competition. Customers have wider choices today than ever before and a small manufacturer who sells to a larger manufacturer, especially, can be replaced with a competitor in Brazil, Korea or China. On top of the globalizaiton challenge, the pace of technology has ratcheted up and customers often want the latest machinery. Someone pointed out recently that as manufacturing became digitized over the past decade, they too became susceptible to Moore’s Law, which was applied in semiconductors. Namely, that every 18 months, the number of transistors in integrated circuits would double. This technology acceleration affects the products that use the semiconductors, too.

Good customer service differentiates manufacturers and can give an edge. Additionally, new processes and techniques, like lean, have transformed manufacturing so managers can build product almost to specification for a customer, rather than churning out a range of products that a customer has to take off the shelf. In our recent publication on small manufacturers, The Future Success of Small and Medium Manufacturers, we interviewed a number of business owners.

Mary Andringa is the successful co-CEO of Vermeer Manufacturing Co. in Pella, Iowa, a maker of construction and agricultural equipment. We interviewed her for our booklet and here’s what she had to say about why customer service is important to her business: “We talk to customers not only about product design but also about operating factors most crucial to them and how we can address those factors. We have participated in weeklong programs with customers on their construction sites, watching how they are using our equipment, how much time they spend looking for things, and whether they are having problems with certain construction processes or with the equipment itself. Then we question what we can do to take some waste points out of their processes. These sessions with our customers are similar to kaizen events we have on our own factory floor.” (In a kaizen event, a multifunctional team spends a day or several days focused on how to simplify, speed up and eliminate waste from a particular process like an assembly operations in a factory).