The global economy may struggle, but Smart MWBEs Win in the Manufacturing World

Manufacturing has earned a reputation as a struggling industry over the last few years. Detroit’s struggles are widely known, while the global economic slowdown has led other firms to hold back on investment and expansion. However, while former flagships may be pulling back, looking deeper into the Tier 2 space reveals a vibrant environment for MWBEs ready to take advantage of the key opportunities in the manufacturing space.

Trending Opportunities

Manufacturing is by no means dead. Instead, new trends are emerging to guide the industry into the next age. Some of the biggest trending opportunities for minority and women-owned businesses include sustainability, innovation, efficiency, cell phone technology, and online applications according to Managing Automation.

The first is sustainability, a topic covered extensively in these pages. No wonder. Companies around the world are realizing the bottom line value in sustainable business practices, pushing it to the forefront of their business concerns throughout 2011 and beyond. Minority firms that can speak to the sustainability needs of an organization in any capacity have the chance to deepen their relationships with that firm.

Innovation and efficiency are other ways minority firms can jump on trending needs. Many manufacturing firms are chained down by legacy systems or footprints designed for another technological era. Nimble, out-of-the-box delivery from minority suppliers can help firms leapfrog their own under-performing systems to arrive at the cutting edge.

Cell phone technology and online factors are another space that’s moving to the front of the line. Cell doesn’t just mean applications for smart phones. It means the opportunity for firms to effectively manage their inventory and supply chains from anywhere along the supply path. Minority firms that can provide this technology or support services can get in on the trends. Minority businesses comfortable operating in the cloud and interacting through online systems also have a significant market advantage over less integrated firms.

Working to Stand Out

Knowing these trends, how can MWBEs differentiate themselves in the industry? The first step is to be sure they are bringing their best to the table. Minority firms need to do their due diligence prior to approaching manufacturers, and they need to have a track record of performance to back their value propositions.

Manufacturers are increasingly interested in this combination of a desired value-add coupled with performance quality. One example of this can be found in United Technologies Corporation, which uses a “Gold Standard” to measure the success of MWBEs and other suppliers. This standard looks at the percentage of the time that suppliers meet internal requirements and end user satisfaction marks. Firms that can meet the mark at 100 percent of standard over 12 months are awarded “Gold Status” and recognized as a preferred supplier by the firm. Firms that can’t meet standards – or can’t meet them consistently – suffer a disadvantage in future contract competitions.

Standards like these are not uncommon, and they work to propel suppliers to higher manufacturing quality heights. By refusing to bank on simply being the minority firm at the table and demanding the opportunity to deliver at a superior performance level, MWBEs can secure lasting contract relationships and Tier 1 supplier positions.

Building Capacity

Of course, pure quality is somewhat balanced against scale. Many manufacturers are tightening up their supply chains, preferring to work with a smaller number of high quality suppliers over a broad pool of vendors. MWBEs can win here if they can build the scale to keep in the game even as supply chain managers are tasked with doing more with fewer relationships.

Developing scale internally is one choice, but minority suppliers in the manufacturing space as well as other industries are increasingly looking to partnerships. These partnerships can offer minority firms the scale and scope they need to bid competitively on new contracts in a tightening environment. No longer bound by in-house or geographic constraints, minority business partnerships can expand their contract reach and the potential for greater growth.

This partnership trend is a contrast to the fiercely independent nature of many minority business owners. However, faced with harsh economic realities and tighter margins, minority business leaders who can look beyond their own walls to the allies that lie within their communities have the potential to emerge from this economic period as major winners. Growing and deepening manufacturing relationships during a downturn and having the capacity to stay a player even in a slump means that minority business partnerships will be in prime position to capitalize on future manufacturing surges.

Going Global

These manufacturing surges will come, though it may not be from traditional sectors. The global economic environment shows that growth is shifting from the northern economies south. Southern hemisphere nations have the youth bubble populations and hunger for finished goods that are key historical drivers of manufacturing strength.

This shift forced a global extension to the business models of MWBE manufacturers. It is no longer enough to simply focus on what is happening within national borders. MWBE manufacturers have to keep abreast of the trending opportunities globally and how those trends are translated into practices on the ground. What does efficiency look like in African nations? How does sustainability shift production practice in South America?

In this sense , the U.S. manufacturing environment presents a training ground for MWBE manufacturers ready to seize the next level of opportunities. Stepping up their performance records and driving innovation for system-bound firms gives MWBEs the experience to lead when developing economies come looking for talent.

Manufacturing may fight a reputation as a struggling industry, but MWBEs know better. Under the surface, there are many opportunities to drive innovation and delivery around key trending needs with an eye toward the world’s developing economies. Building capacity and strength, MWBEs can win not just this round of the manufacturing cycle, but continue winning as the future unfolds.