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Competing against off-shore manufacturing - Q & A

Mike calls to talk about off-shore manufacturing and some ways that domestic manufacturers can compete.

Rich Sloan:  We've got Mike out of Taylor, Michigan.  Welcome to the show.

Mike:  Thanks Rich and Jeff, how you guys doing today?

Rich Sloan: We're doing great.  How are you?

Mike:  I'm doing real well.

Rich Sloan:  Are you an entrepreneur? 

Mike:  Yes, I am.        

Rich Sloan: All right.

Mike:  Yeah.  I've got a small company.  It was interesting listening to your previous caller.  We're actually a manufacturer as well.

Rich Sloan:  Okay.

Mike:  Truthfully, the reason my call came up, was listening to the show over the last couple weeks, similar to what you're previous caller stated.  We do contract manufacturing as well as manufacturing engineering.

Rich Sloan: Okay.

Mike:  It was interesting listening to the show a few weeks back.  It seems to me that what I've heard from a lot of entrepreneurs, especially those that have developed their own products, is there is a natural tendency to immediately jump to outsourcing as a model for their manufacturing.

Rich Sloan: When you say outsourcing you mean, sending it overseas?

Mike:  Correct.

Rich Sloan: That's off-shoring.

Jeff Sloan:  Off-shoring.

Mike:  I should say off-shoring, more than anything else.

Rich Sloan: Yeah.  Right.

Mike:  And that trend is a bit concerning to me.  Not necessarily from a protectionist standpoint, and I have no issue with a lot of the work being done off shore.  However, it seems like it's become in-vogue enough at this point that, as your last caller stated, it's difficult for entrepreneurs with good ideas to find people who can manufacture.  And it's difficult for contract manufacturers to find people with the ideas –

Rich Sloan:   Right.

Mike:    -- that need that kind of a service.  That oftentimes it seems that we're headed overseas awfully, awfully quick.

Rich Sloan:   Are you a contract manufacturer?

Mike:    Yes, we are.

Rich Sloan:   And so what kinds of things do you make?

Mike:   Right now we do everything from fishing lures to medical test equipment.

Rich Sloan:  Uh-huh.  Interesting.  You know, Jeff, it is so true.  So much attention is focused on the overseas manufacturer.  Just out of curiosity, can a domestic manufacturer compete and if so, how can they out-compete an off-shore alternative?  You've got about a half a minute.

Jeff Sloan:  Absolutely.  And the way you do it is by differentiating yourself from what most people consider manufacturing organizations.  The way to do that is to stay small, stay lean, forget about the mahogany desk.  Go to a level of automation and manufacturing efficiency that will allow you to compete with, basically the cheap-labor market.

Rich Sloan:  And I'll tell you another thing too, compete on your strengths.  Compete on the quality you're going to be able to deliver and also compete on the fact that the manufacturing is done right here in the person's back yard.

Jeff Sloan:  Easier to manager.

Rich Sloan:  Easier to manage.  No shipping costs across the ocean and no long waiting time for the product to get here.  Those are advantages of a US manufacturer.