MWBEs Have Chance to Shine in Uncertain Market

The U.S. credit downgrade was another black eye in the ongoing beating the world economy seems determined to receive in 2011. Everywhere you look, it seems that economic bad news is the order of the day. Downturns, retreats, and falling prosperity levels can certainly make it seem like a bad time to be in business.

And yet, 66 percent of manufacturers stated they felt optimistic about 2011 in a survey by FoodProcessing.com. Nearly half – 44 percent – anticipated growing this year. Either everyone’s gone delusional, or there’s more to the manufacturing story than meets the eye. Manufacturers are looking to focus on their keys to success, build on their trending growth patterns, and put technology to work on their side.

What’s Really Important

The good thing about tough times is that they tend to strip away the non-essentials from what really matters to a business. In 2011, manufacturing companies left fluff behind to drill in more closely to what really matters. This meant more attention on sustainability, innovation, and smart use of technology, according to Manufacturing Business Technology.

Sustainability matters because it directly impacts the business bottom line. There are supplier costs that can be controlled using sustainability initiatives, something with which MWBEs in the logistics sector are very familiar. End users are also showing a preference for products that are green, LEED certified, or carbon neutral. Manufacturers want that market share and the back end cost savings, putting force behind sustainability initiatives.

Innovation is another area that matters because manufacturers know that standing still is suicide. They want nimble, evolving processes and smart answers to tough questions. Minority firms are at an advantage here, since MWBEs drive innovative practices in many domains. Bringing value-added innovation to the table is a way to lock down superior contract terms and move up in the supplier food chain.

Last but not least, manufacturing companies in 2011 are indicating that smart use of technology matters. This is a critical key in successful supply chain management in 2011 and beyond, since smart technology use cuts down on inefficient practices, materials waste, and internal loss. RFID, interactive product labels, and better logistics management brings control down the supply chain and makes even small MWBEs key parts of a successful bottom line.

Where the Growth Is

Looking at what matters, MWBEs can quickly see where the growth is now and going to be in the years ahead. Manufacturers are embracing more of the lean trend, relying increasingly on technology to survive, and open to innovative developments to move the bar. With the outlook for manufacturers showing flat or only slight positive growth on the sales side of things, manufacturing growth has to be driven from the inside by making the right decisions.

The lean movement plays right into this mindset. Doing more with fewer resources and less inefficiency warms a manufacturer’s heart. Even in environments that are already quite lean, the continuous improvement model delivers the incremental savings manufacturers depend on to offset rising costs. MWBEs that understand this or who can help move the bar that much further up the curve are at a competitive advantage.

MWBEs will also have to show that they have the technology to survive. Living outside the latest innovations or being ignorant of emerging systems puts MWBEs on the road to being obsolete or being suppliers of last resort. MWBEs need to leap to the front, showcase their nimbleness, and demonstrate to manufacturers that they are ready to be there for the future.

Living this openness to innovation and development shows that the right decisions are there in the MWBE management structure. Manufacturing as a whole has held back on cloud products and social media, but these have the potential to give the competitive edge to those who know how to use them, according to Managing Automation. MWBEs that do the legwork for their supplier partners can deliver big wins for manufacturers and take those wins all the way to the bank.

Finding Allies

Being a trailblazer is a natural role for many MWBEs, but that doesn’t mean it is without its costs. Minority firms and their manufacturing partners both face capital access issues. Both are addressing those capital issues by looking to build more profitable partner relationships.

For MWBEs, building partnerships can cross technological lines or geographic barriers. The process of developing the relationship can be cautious – firms want to protect key service processes and intellectual property – but the benefits are real. Firms that have broader scope and capacity can make a better case for large contracts, which in turn helps prove business worthiness for securing lines of credit with banks and vendors.

A network of allies can also help MWBEs thrive in the manufacturing space outside of the bankbook. Shared intelligence, expanded networks, and friends create the space for mentorship, coaching, and brainstorming ways to grow as a company and an industrial niche. Going it alone in a tough economic environment is a hard road, and it’s one MWBEs don’t have to travel.

Looking Ahead

Looking toward the future, it is a certainty that this negative business cycle will end. The firms left standing will be those that stepped up to the plate to focus on what mattered to their clients and those that embraced every resource around them to pull them through the tough markets. Hopefully, many MWBEs will be standing tall when the smoke clears.

Grim endurance isn’t the only way. MWBE community networks are rich, strong resources that can be leveraged as intelligence repositories and guides. More than one firm will be successful even though the global manufacturing outlook is flat. Firms with the brainpower and willpower to build scale, secure partnerships, and optimize their operations are going to turn out just fine whether the recover takes two years or ten. While the manufacturing space does have serious challenges, it also has opportunities, and MWBEs have the internal potential to rise above the challenges to seize the opportunities.