The Manufacturing Industry Blog

It has been interesting to watch the Automotive industry and how they are dealing with the economy.  Clearly “Cash for Clunkers” provided a big boost for car dealers in July and August.  Although speaking with a friend who manages automotive lending for a large bank, she saw the majority of sales were the class 2 economy cars, and dealers were not moving a lot of high end cars or trucks with their associated higher profit margins.  Luckily for them, the government did come through with the rebate checks.  However, now business is down again and many dealers are depending on manufacturer’s cash back programs, and some even resorting to their own rebate programs.

And what about brand loyalty?  One example, my brother, a loyal customer for one of the larger automotive brands for the past two decades was going to trade in his clunker truck for a new vehicle of the same brand.  However the dealer switched the agreement at the last second – so my brother went to a different dealer and ended up with a better deal, a similar vehicle, but a completely different brand.

Is this really the way to reach the consumer?  Is a “trade-in” or rebate marketing approach going to be effective long term and can this kind of approach be sustained?  Innovative companies are taking advantage of cross-media communications, and carefully engineering all the touch points with their clients – from email to personalized web-sites to direct mail, and even personalized videos.   They are not only effecting brand loyalty, but also opening new opportunities for after market sales and cross-selling.  Please comment and share with us if you have any ideas around this and how you are taking advantage of your customer data to improve your business.

Click here for a short video about our perspective on communication engineering.

Last month I wrote about some considerations for document and content security.    I learned about another consideration in security that we have been working on with a provider of energy services.  They face stringent security requirements especially since they are involved with Nuclear Power stations.   In order to keep costs in check they rely on contractors to perform maintenance and keep the stations running.  

The time and cost to bring on new contractors is significant.  They must perform a full background check on each contractor.   This process involves a lot of forms that are first filled out by applicants and then forwarded to multiple agencies.   It takes several days to complete this security clearance and during this time the contractors are paid to sit and wait.  Additionally the risk exists that if they are short staffed, the delay to the scheduled maintenance could result in excessive costs and the loss of revenue.   The estimated cost to run a power station is around $1 Million per day and the revenue lost when the power station is not running is in excess of $1 Million per day, so having staff available quickly is critical to a successful and profitable operation.

This is where business process re-engineering comes into play.   By providing digitization technology, and streamlining the workflow, they will be able to significantly reduce the actual time to complete the security clearances, including a reduction in staff time required, and have their contractors working more quickly. 

Are there any other examples where new security measures are requiring more complex and time consuming processes that you can share?

In response to the pressures of product complexity, competitive pricing, supply chain transparency and partner choices, manufacturers have embraced innovation.  According to The Economist, a company must replace 10% of its revenue stream with new products and services every five years in order to stay competitive in business. Through innovation, companies develop the flexibility to respond to market drivers, product niches and competitors.

However, when thinking about “product”, let’s consider more than just the unit shipped.  As manufacturers have become increasing closer to the customer as a result of the web and Boomerang Effect, the “product” has actually become the entire client experience.  This includes the physical product, the services associated with and around the product, the delivery of the product and services, and the environment the product produces.  These are all important areas where innovation can, and must occur.

The key will be effective collaboration.  It is critical to collaborate across the complete lifecycle of a product.  The ability to make design information available to marketing, customer service, and other functional areas, as quickly as possible, enables a free exchange of ideas that avoids poor design, improves the services associated with products, and creates a cohesive supply chain.

Surprisingly, much of the infrastructure needed for collaboration exists today within organizations and remains under utilized.  There is great potential for improvement; however, manufacturers continue to struggle with internal culture inhibiting collaboration and on which technology to standardize.  Will spreadsheets remain the most prevalent design/engineering collaboration tool in use in the industry today, as stated by Manufacturing Business Technology?  Or, will collaboration systems finally become part of the organizational fabric that will lead companies to success in the manufacturing market?