Worried about loosing work to low-wage countries such as China and India? The survival trick is finding a sharp competitive edge. A few examples of how companies have adapted to the harsh realities of global business may spark other survival ideas.
Take CEJN Quick Response Work Cell, for example. The Gurnee, Ill.-based company is a small version of its Swedish parent firm. The shop focuses on quickly building prototypes and short runs of specialty, quick-disconnect couplings and high-pressure-hose assemblies. "We know customers can choose from many global suppliers," says Division Manager Steve Goulette. "So we differentiate by focusing on niche applications. For example, security features on some of our couplings prevent the devices from being used with the wrong fluids. "Profit is not a primary concern at this point. Our company vision is that being successful in prototype and customized, short-run parts will lead to customers specifying parts more often and turning them into production items."
Another tactic is using the same equipment as the parent plant. "Thus, when our engineering manager is unavailable, personnel in Sweden can easily answer questions."
Another company, Crane Engineering Inc., a design and engineering firm in Plymounth, Minn., says it has helped customers reclaim business lost to low-wage countries. "Success comes from using sound engineeringmanagement practices that have constituted successful business practices," says President Tom Crane. "And proper interpretation is critical in making sure product specifications for U.S. manufacturers will, in fact, mate with those used by offshore producers."
Crane says success comes from applying quality control everywhere, including how product are manufactured,-initial specifications, checking specifications against designer intent, validation-before production, and prototype testing. "Offshoring promises low-cost products," he says. "But low initial cost means nothing if the product fails. Costs associated with worse-case scenarios, such as recalls, can be astronomical."
Lastly, a rather dynamic approach comes from a Rockford, Ill., organization that promotes manufacturing in a region that like many in the U.S. has lost manufacturing work to overseas competition. "Small and medium-size businesses in the area created the Manufacturing Alliance of Rock River Valley or MARRV to combine skills to win projects the companies couldn't get on their own. The organization practices a form of agile manufacturing: member companies collaborate on a project and then disband and reform to work on the next. We did so well on some projects, it brought back from China and India," says co-founder and Vice President Bob Trojan. "We're one-stop shopping. Member companies provide services from design, R&D prototyping, engineering fabrication, heat treating, machining, to injection molding."
Trojan says the group started as a volunteer effort by business owners and managers. "We modeled it after an organization in Northern Italy," he says. "We then created a full-time organization and got funding from the Federal EDA, State of Illinois, city of Rockford, Winnebago county, banks, and MARRV members."
So it seems a lesson to learn is that competing with low-wage countries is partially a matter of doing what they cannot. Other ideas might include crosstraining employees so they can handle unusual jobs, find new ways to do things, and, perhaps most important, keep pushing for improvements across the board.
Do you have thoughts on how to best compete with low-wage countries? If so, send in your ideas and we will publish them in the magazine.

--Leslie Gordon