Many U.S. job shops once relied mostly on word-of-mouth for new customers. But it takes more than that to be a success in a global economy. Shops today must devise strategies, identify and target niche markets, and above all, automate. The latter, according to Harry Moser, chairman of AgieCharmilles, the Lincolnshire, IL, based N. American headquarters for Swiss-based GF AgieCharmilles, means going after work in which labor is a small percentage of total costs and finding the right equipment and processes. A few guidelines, he says, help ensure shops' success. And it wouldn't hurt if the U.S. government stepped up to level the playing field. More on this later.

For starters, companies might perform what is known as a Strengths, Weaknesses, Opportunities, and Threats analysis. (More information is available on the Chairman's Corner of the AgieCharmilles Web site at agieus.com.) After completing a basic SWOT matrix, companies identify workpiece and market characteristics that match its strengths. The firm then forms an action plan to take advantage of what it has learned.

Interestingly, some business considerations previously deemed negative might now be positive. For example, the possibility of lawsuits kept manufacturers away from some products such as heart valves, for which any liability issues would be costly. But this is now an opportunity. “For instance, recent quality issues with products from China give shops targeting medical OEMs a good argument for sticking with U.S. suppliers,” says Moser. “When there are quality problems with Chinese suppliers, OEMs will probably not recover damages. But the U.S. legal system would ensure OEMs get satisfaction from U.S. vendors. Of course, savvy U.S. shops should make sure to have enough liability insurance.”

Another plus for keeping sensitive work in the U.S. is that confidentiality agreements are enforceable by law. This eliminates OEM worries about offshore suppliers copying and producing goods under their own labels.

Another opportunity for success is in developing your workforce. “There are not enough skilled machinists and tool-and-die makers in the U.S. But this is also true for Hungary, Estonia, and essentially every country in the world. Thus, companies with a ‘good-enough’ supply of workers tend to succeed. And key to this is training. Companies should have apprentice programs if they can afford them,” says Moser. “Smaller companies should be on advisory boards of local vocational schools and community colleges, so they get the pick of the best students when it's time to hire.”

To really boost the workforce, says Moser, the U.S. government needs to convince China to raise the value of its currency. “This would raise the effective income of Chinese workers relative to those of Americans and reduce China's competitive advantage,” says Moser. “A good way to accomplish this would be to threaten them with stiff tariffs on products they sell here. As China's currency climbs, currencies of other Asian countries also will go up. U.S. manufacturing would then be more competitive with those countries. Also, the standard of living of most S.E. Asian workers would rise,” he says.

“Made in Japan” once had negative connotations. It took that country about 30 years to give the phrase a positive ring. China has leveraged turning out low-cost goods into a favorable trade balance with the U.S. in a third of the time it took Japan. Also, China is working hard to correct the bad-quality backlash, and not by slapping wrists. Recent news reported that the Chinese government recently executed a corrupt government official said to be responsible for pharmaceutical quality control. So, it's time to strike while the iron is hot.

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