Manufacturing Risk! What, no business plan?

A contract manufacturers that operates solely by a near term customer perspective versus a longer term market based strategy, assumes considerable risk to growth, and even its survivability. Unlike in the past, current market instability requires more than to rely on a sales rep bagging the next project, in effect, to save the day...or the next couple of months.

What amazes me is how often, even a mid-sized manufacturer, admits to not having a business plan. And of the business plans that do exist, many do not reflect a prediction of the future, but more of a near sighted view for the obvious, essentially a sales-plan. A forward looking business plan is crucial to laying the foundation for perspectives and actions that lead to sustainability, and future growth.

An important element of the plan comes from listening to the market for shifting needs and new or potential trends that have near or long term consequences. Changing competitive influences and industry wide trends provides the additional fuel for a projection of 2 or 3 possible strategies that a manufacturer will be poised to adopt, depending on future market conditions.

Please share your thoughts with Dennis at dennisparis@tangerinestrategies.com

Deeply troubled companies don't usually seek help... Why?

Organizations that need help the most will benefit from it the least. Why? The most critical issue centers on leadership, not performance down the line. Small wonder that leaders of troubled companies tend to shy away from calling in consultants. They know that they will have to do some serious self examination... This, according to Richard Farson, author of Managing the Absurd (chapter #15), which is required reading for Executive MBA candidates at area universities.

I could not agree more. I have worked with many entrepreneurs, owners and senior managers of small and medium sized businesses. Some of the most skeptical and change resistant leaders have been those of companies who's positions in the market have degraded or are stagnating at best.

Please share your thoughts with Dennis at dennisparis@tangerinestrategies.com

Manufacturing and the importance of innovation...

An article in the Autumn 2011 edition of strategy&business pointed out not only how important innovation is to the manufacturer itself, but to the U.S. economy. It stated that; In 2008, 67 percent of all private sector R&D was by manufacturing companies, according to the National Science Foundation. Innovation propels improvements in worker output, capital flow, usage of materials and energy among other components of productivity. Increased productivity leads to faster economic growth and higher standards of living. And from 2006 to 2008, 22 percent of U.S. manufacturing companies reported a new or significantly improved product, service or process, compared with only 8 percent of non-manufacturing companies.

From my vantage point as a market strategist and a new product development (NPD) process advisor, for a manufacturer that generates all of its revenue through custom contracts, very little investment is required to explore opportunities that leverage its future with either an improved production process or new commercialized product. A flexible NPD process offers a manufacturer the benefits of a "creeping commitment" and strong guidance to accumulate enough data to support the decision to take the leap!

Please share your thoughts with Dennis at dennisparis@tangerinestrategies.com

NEW PRODUCT DEVELOPMENT: Why New Product Initiatives Fail

If you attended my speech at last Fall's IFAI EXPO business track on "Growing Your Business Through New Product Development", or not for that matter, consider this..

About 54%* of NPD Initiatives and 65%* of New Product Launches actually succeed…

Conversely, why do so many fail? There are several reasons why an NPD initiative can fail, but in my experience, it all comes down to these 3 central reasons;

1. Voice of customer was not taken into consideration.
2. There was no process in place.
3. The company's internal culture was not supportive.

Before beginning your NPD initiative, make sure that you;

(A) Clear up the fuzzy front end by getting your senior team and staff on the same page... Do this with a Product Innovation Chart (PIC) (See my next blog)

(B) Select an appropriate NPD Process

(C) Embrace the voice of the customer in your product design process

*Source: Booze-Allen & Hamilton

Brought to you by Dennis Paris of Tangerine Strategies, LLC.

Please share your experiences with dennisparis@tangerinestrategies.com

Before Investing In New Product Development

Make sure that your operation's capabilities meet or exceed the requirements of your new product development project BEFORE you make a major investment! Assess every requirement before investing in equipment, manpower or even 3rd party manufacturing resources including, but not limited to engineering, production, procurement, sales/marketing and customer services.

Recently, I listened to a horror story by an entrepreneur who took a new product concept to a manufacturing company that boasted a high level of engineering expertise. They reviewed the complexed product specifications and gave it a thumbs-up but missed one attribute of expertise that led to failure...precision.

After $400,000 was invested in new machinery and tooling, it was discovered that the level of precision necessary to convert the drawings into a properly functioning product, exceeded their engineering skill and equipment capabilities. Numerous production attempts consistently fell short of market worthiness and the investment was lost.

Determine if your new product development concept strategically fits your business or that of a 3rd party's manufacturing operation. Identify ALL of the requirements of your new product's attributes and then examine products with similar attributes that have successfully gone through the same engineering, design and manufacturing process. Leave no stone unturned.

Posted by Dennis Paris, Tangerine Strategies, dennisparis@tangerinestrategies.com

NEW PRODUCT DEVELOPMENT: Clearing Up The FUZZY Front End... The PIC Exercise

New Product Development “PIC” Exercise

Successful companies translate their corporate strategy into a strategic policy for common vision before initiating the NPD process.

(PIC) Product Innovation Chart:

A 1-2 page document that gets everyone in the organization on the same page (finance, sales, engineering, production, reception). The PIC includes, at a high level;

1. Back ground of product line
2. Customers
3. Market places
4. Core competencies
5. How to make and sustain product advantage
6. Product goals and objectives
7. Tactical approach to market place


The PIC accelerates critical discussions between Engineering & Marketing. It's not difficult to do and takes about 1-2 hours to complete. It is simplistic yet powerful!

Brought to you by Dennis Paris of Tangerine Strategies, LLC
Please share your experiences with dennisparis@tangerinestrategies.com

Helping Manufacturing To Recover In 2010 Begins With Its Own Culture!

Without question, the challenge now is greater than ever to identify stable, let alone growth markets, particularly for many manufacturers. And, it's more important than ever to target markets that represent less sensitivity to economic conditions.

Research that I conducted for the Manufacturing Alliance of Philadelphia and the Urban Industry Initiative, not only revealed a needs-gap for which MAP President, Steve Jurash is developing new services, but it has deepened my own perspective on manufacturing growth challenges that lay ahead. After interviewing Owners, CEOs and Presidents throughout Philadelphia, a big challenge that I find exists begins internally, within the business culture itself. I am speaking of manufacturers that have relied mainly on "opportunistic selling" as a strategy to sustain or grow their businesses. By the way, "opportunistic selling strategy" is an oxymoron!

The bottom line is this. Many traditional manufacturers of durable goods and those who provide contract services, are dependant on markets highly sensitive to economic conditions. A term used to describe these markets is "cyclical". When the economy shifts, so do cyclical markets and so goes the business, either up or down. Thus, a severe decline and slow recovery during this recession for many manufacturers that serve "cyclical markets".

When I spoke on this subject at a past Philadelphia City Wide Manufacturer's Meeting sponsored by MAP. My strong advice to all business owners in that meeting was straight forward... to develop a hedge marketing strategy, including a partial shift to markets that are less-cyclical.

Also, add a process for developing new products for emerging market niches and finally, consider bi-directional/International market opportunities. For example, GroupLamerica, LLC is highly experienced at matching not only US manufactured products with Latin America markets, but conversely with interest in US manufacturing operations to access US markets.

The point is, with minimal investment and some out-of-the-box thinking, manufacturers can create a new strategy mix that will allow them to "hedge" against further negative shifts in the market. And without a doubt, it can accelerate business growth in a recovering market!

Tangerine Strategies, LLC is a Certified Vendor and Coaching-Consortium coach for the Manufacturing Alliance of Philadelphia membership. MAP assists with the resolution of manufacturer's challenges including, closing the skills gap that prevents companies from obtaining highly trained employees through the first of its kind Job Ready Program.

Copyright (C) Dennis Paris 2011

IFAI EXPO: Biz Track... New Product Development as Business HEDGE!

If you are attending the 1:00PM - 2:00PM October 27th IFAI EXPO business track on "Growing Your Business Through New Product Development", presented by Tangerine Strategies' Dennis Pairs, then consider this... While the authorities to be have announced that the recession has officially ended June of 2009, many businesses are still laying off workers. Also consider that demographic data suggests that baby boomers have reached an age where total spending is now declining. This is a concept that is shared by many renowned analysts, however an article by Thomas Corley on ezine articles titled "Amercias Shrinking Economy and The Demographic Shift Causing It" does a nice job of explaining it.

If your business depends on economic recovery levels back to pre-2008, we may become seriously disappointed as the demographics continue to play out. The point is, this is a critical moment in time where businesses MUST plan for their future, and New Product Innovation and Development is one avenue to HEDGE the direction of the markets!