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10 Lessons learnt from a SME Manufacturer

Factory Image from Bing by Matthew BroomheadI was invited to attend a VIP tour of a SME manufacturing company in my region. I had just attended a Leaders panel discussion that morning where two thirds were Bankers and there was a distinct lack of optimism for growth within the area. So it was a welcomed contrast to be shown around a manufacturing company with an established history and appeared to be doing well in a very competitive global market.

These are ten observations I made that contributed to their success and you may want to see how they could apply to your organisation:

  1. Strong Brand – The company had a long established and interesting history which was used in their branding to create a compelling story. The visit comprised of story after story of how they had got to be where they were and their client experiences.
  2. Superior Customer Service – Most people know that for an organisation to succeed we have to have the attitude that everyone is in customer service. Helping staff to understand that everyone is in customer services is crucial. At the manufacturing company Cleaners understood that if they didn’t do their job to the best of their ability then if the product was a little dirty when it reached the consumer, then that would have an adverse effect on future sales.
  3. Lower distribution costs – They were intelligently using logistics to reduce the ever increasing transportation costs.
  4. Local workforce – They actively encouraged using a local workforce which had a number of benefits including reducing the environmental impact of commuting.
  5. School links – Part of the reason why they could utilise a local workforce were the school links they had created. Allowing children to visit the company and giving them interesting school tours created a waiting list of school leavers that wanted to join the company as soon as they had finished school, instead of going to University. This reduced the need for external recruitment firms and their associated costs.
  6. Access to pockets of differentiated knowledge – This consisted of exploiting “clusters” of R&D knowledge centred on leading universities and their research facilities.  By cleverly creating amicable relationships with University researchers saved substantial costs.
  7. Investing wisely and using the latest technology – Even though the factory appeared to be over one hundred years old there was some sophisticated modern manufacturing machinery.
  8. Very strong and active I.P. – Intellectual Property protection was crucial particularly as significant copying attempts had been made from rival Chinese manufacturing companies.
  9. Understanding product pricing – Inspired by Seth Godin I have written and talked about this previously. There are two races now in the modern economy. A race to the top or a race to the bottom. The problem is who really wants to win the race to the bottom?
    They marketed their standard products against the competition by claiming to be superiorly manufactured and therefore a better product that justified the extra cost. As well as products that sold at the lower end of the market they also manufactured a product that fundamentally did the same thing, but because it was encrusted with diamonds and packaged differently, they had sold them for 800 times more to a global corporate. So as well as been positioned as a higher end quality product they also sought out new markets for what they did.
  10. Financially reward staff for new ideas – I have mentioned this in a previous Article. Not everyone is motivated by money, but if your organisation lacks good ideas then rewarding people for new ideas whether they are used or not is an interesting concept.

Those are the ten lessons that I learnt from my visit. Remember that as an organisation, success is something we attract by becoming an attractive organisation. So you may want to mentally highlight a few of these points and explore how they could apply to your situation.

Matthew Broomhead
“Raising the level of Business Skills in Britain”
Creator of Broomhead Business Channel

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