Executive Briefings

How Can We Keep Growing U.S. Manufacturing?

America has done a good job of solving internal manufacturing problems, improving quality and reducing waste and costs. These internal programs have kept American manufacturing in the game. But there is a problem. Manufacturing isn't growing in terms of factories, percentage of GDP, employees, or sales revenue.

Staying with current by Coupon Companion Plugin">marketing and sales strategies is not going to increase sales. The old paradigm of being loyal to your customer, depending on a few large customers, and focusing all of your resources on improving your operational systems to reduce cost and waste, are not working.

If you examine the by Coupon Companion Plugin">customer list of most manufacturers you will find the 80/20 rule applies. In other words, 20 percent of their customers account for 80 percent of their sales volume. In fact, it is common for only 10 percent of the customers to account for most of the smaller supplier manufacturer's sales volume.

Needless to say, the profitability of these customers becomes a very serious issue. For the last 20 years, customers by Coupon Companion Plugin">up and down the supply chain have been trying to reduce costs to compete in a global economy. The pressure from many of these larger customers has forced price/cost reductions onto their suppliers. But depending on a few customers for your existence is a dangerous game. They may decide to offshore their products, use a foreign supplier, or increase their pressure to lower prices.

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Keywords: supply chain management, value chain, U.S. manufacturing's future, U.S. manufacturing's growth

Staying with current by Coupon Companion Plugin">marketing and sales strategies is not going to increase sales. The old paradigm of being loyal to your customer, depending on a few large customers, and focusing all of your resources on improving your operational systems to reduce cost and waste, are not working.

If you examine the by Coupon Companion Plugin">customer list of most manufacturers you will find the 80/20 rule applies. In other words, 20 percent of their customers account for 80 percent of their sales volume. In fact, it is common for only 10 percent of the customers to account for most of the smaller supplier manufacturer's sales volume.

Needless to say, the profitability of these customers becomes a very serious issue. For the last 20 years, customers by Coupon Companion Plugin">up and down the supply chain have been trying to reduce costs to compete in a global economy. The pressure from many of these larger customers has forced price/cost reductions onto their suppliers. But depending on a few customers for your existence is a dangerous game. They may decide to offshore their products, use a foreign supplier, or increase their pressure to lower prices.

Read Full Article


Keywords: supply chain management, value chain, U.S. manufacturing's future, U.S. manufacturing's growth