Volume 2, Issue 6 - June, 2003

For the last couple of issues, we have talked about the concern that exists about the movement of manufacturing offshore to China. If there is one company that exemplifies that movement, I would suggest to you that it is Techtronic Industries. Led by Horst Pudwill, this $1 billion dollar company has been making the Sears power tool line for several years, acquiring Ryobi in 2000, Homelite in 2001 and most recently acquiring Royal in 2003. (Rumor has it that Mr. Pudwill wants to become the King of Power Tools.) The TTI web site (www.tti.com.hk) currently has a very nice presentation of their annual stockholders meeting, which I would recommend you take the time to view. Last year they introduced 150 new products. They are consistently growing at 20% per year and plan on doubling their business in the next three years. TTI achieved those growth numbers with 85% of its business coming from the soft U.S. market. How many domestic manufacturers can claim that kind of growth in the last few years or even hope to double in the next three years?

Throughout my career, I have heard just about all of the comparisons between war and business strategy. If you are my age you read The Prince by Machhiavelli, Positioning: The Battle For Your Mind by Reis and Trout or maybe Clausewitz on Strategy by Ghyczy, Oetinger and Bassford of the Boston Consulting Group. All of these books, and probably many more, equate business and war. Certainly I have read and understood much of what they were trying to say in these books, but it is only as a result of the War in Iraq that I have started to develop thoughts of my own along these same lines. I guess if the analogy works, use it.

The TV analysts and imbeds have continued to point out that the Iraq War has changed the way that wars will be fought. This isn’t the first time that soldiers have had to change they way they fight (Don’t forget the way the cannon changed the way earlier wars were fought), but it does signal how speed and accuracy or precision are now ways of gaining competitive advantage.

Accuracy or precision allowed the Coalition to target specific buildings while leaving surrounding buildings untouched. In the past it would have taken carpet-bombing with much greater destruction to achieve the single objective. The numbers of bombs dropped in World War II to accomplish hitting one target as compared to the one or two smart bombs dropped today to hit one target was incredible. Our marketing and our efforts to satisfy customers have historically been built on the carpet-bombing principle. The technology exists to do smart marketing (something for another newsletter) and do a much better job of meeting the needs of small numbers of customers even down to meeting the needs of individual customers. What are you doing to improve the accuracy or precision of your companies marketing efforts?

The Coalition forces were able to travel the roughly 300 miles to Baghdad in record time while maintaining their supply lines. This was a feat unheard of and apparently unanticipated. From a business standpoint, we all understand that a quality product and a competitive price are the price of admission to doing business in this economy. More and more we have seen that the speed of getting a product to the customer is moving in the same direction. The big boxes demand speed to keep their turns up, their inventory down and their cash moving. Most manufacturers lament the amount of business that is at risk with the big boxes, but have yet to try to help their other customers with the same speed in responding to issues and in delivery that would help them survive and prosper in the face of the onslaught of big box competition.

But speed of response and delivery is only a part of the equation. In looking at TTI, they introduced 150 new products last year. How many did your company introduce and how quickly can your company move from concept to completion? This is an aspect of speed that really needs improvement. Certainly speed costs money, but virtually everyone adopted SMED (single minute exchange of dies) technology in manufacturing as a way to optimize the operation. Why not try to achieve the same advantages in new product development.

I got on board with the whole concept this past month when I had the opportunity to witness some truly amazing new technology that might just let U.S. Manufacturers use speed and precision the same way Donald Rumsfeld did during the recent War in Iraq.
The Technology House (www.tth.com ) is a client that specializes in rapid prototyping and is developing RSP ( www.rsptooling.com ), a process for rapid development of tooling enabling rapid manufacturing. The RSP process facilitates mold making by spraying metal to create the die. The process is much faster than conventional processes for creating dies for molding, die casting or forging.

(If you would like to learn more about RSP, call Chip Gear at (440) 248-3025 extension 130 and tell him you read about his process in Taking Aim.)

We may not be able to save the jobs of the tool and die industry, but if we can speed up the process of moving products from concept to completion, we just may be able to save some domestic manufacturing of new products to quickly and precisely meet the needs of specific markets.

Only 7 more months to meet the International Organization for Standardization (ISO) requirement for obtaining and using information on customer satisfaction. If you haven’t started, read more at www.cannonadvantage.com/customer-service.html or call (866) 598-8450 for the Cannon Advantage solution.

Many of you have made the switch to the electronic version of Taking Aim and for that I thank you as it is a much more efficient way for me to get this newsletter to you. If you find the newsletter of value, I would appreciate your recommending it to your colleagues and they are welcome to sign up for the free newsletter on line at our website www.cannonadvantage.com/newsletter.html.

If you have a subject that you would like to see covered in “Taking Aim,” please send me an email at aim@CannonAdvantage.com.

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