What separates the best from the rest
Three straightforward rules • Ten sets of important manufacturing capabilities
What can manufacturing executives learn from them about company competitiveness and performance?
The emergence of China, India, Southeast Asia, Mexico, and Brazil as manufacturing powers has dramatically reshaped competition in the manufacturing industry, which in turn has significantly challenged twentieth-century manufacturing industry leaders in North America and Europe. Of course, it is the competitiveness of individual companies operating in all of these countries that ultimately helps shape the global competitive landscape. It is evident that manufacturers everywhere have been improving their competitive capabilities. And as global competition has increased, it has become that much more important for manufacturing firms to clearly understand the competitive capabilities they need to develop to attain superior performance.
But questions abound. What exactly are high-performing global manufacturers doing today? How are they positioning themselves for future success? In what areas do they differ most from their competitors? What is the secret of their high performance—the competencies and capabilities that have helped separate the very best manufacturing companies from all the rest?
To find out we conducted a study. And in the past 5 years we´ve interviewed more than 1000 CEO´s in the manufacturing industry and collected data. After analyzing all this data we found many things high performers are doing differently.
"It has become that much more important for manufacturing firms to clearly understand the competitive capabilities they need to develop to attain superior performance."
The three rules:
1. Better before cheaper:
Don’t compete on price, compete on value.
2. Revenue before cost:
Drive profitability with higher volume and price, not lower cost.
3. There are no other rules:
Do whatever you have to in order to remain aligned with the first two rules.
Capability clusters related to rule one: Better before cheaper
Overall manufacturing capabilities: Lean and agility hold the key
Supplier network and collaboration: Interconnected for growth
Balance sheet strength, financial and risk processes, and data analytic capabilities: Process resilience
Competitiveness of product pricing
Capability clusters related to rule two: Revenue before cost
Global customers and markets: Where the growth lies
Cost structure: Overall and materials
Cost structure: labor and energy
Capability clusters related to both rules
Brand, reputation, and managing customer perceptions: What’s in a name?
Talent-driven innovation: Future-proofing
Leadership and strategy: Leaders show the way
Becoming exceptional is every company’s goal. The three rules offer a simple framework for explaining how companies can achieve long-term, sustainable market leadership. The Global Competitiveness in Manufacturing initiative identifies the critical capabilities that drive high-performing manufacturing companies while revealing the differentiators that make them unique. Taken together, the two frameworks give manufacturing companies a powerful formula for improving their competitive position and for developing competitive capabilities that separate the best from the rest.