Global Fastener News

STAFDA STATE OF MANUFACTURING: Steiner: Compete With Innovation

John Wolz

“There is no point being in business if you”re not aiming to be the best in your industry,” manufacturer Paul Steiner of Israel-based Kapro Industries Ltd., told the Specialty Tools & Fasteners Distributors Association.\
In the first STAFDA State of Manufacturing speech by an overseas associate member, Steiner urged American manufacturers to compete with innovation rather than price.
“It is my contention that the threat to American industry is not in fact from China, but from complacency,” Steiner declared.
Kapro manufactures measuring, layout and marking tools for the building industry in Israel and China. Products are sold in 59 countries.
“The threat from China is not greater than that posed to American industry by Japanese manufacturing in the 1980s,” Steiner recalled. “A threat that was possibly the major catalyst for an American productivity gain trend that has continued for most of those two decades.”
Steiner recommended “SWOT analysis a comparison of the strengths, weaknesses, opportunities and threats facing the U.S. manufacturing sector, points to a genie in a bottle & an awesome power, looking to be unleashed. The unrealized potential of U.S. manufacturing has kept American manufacturers fearing their foreign counterparts, instead of what appears far more logical the other way around.”
Economic growth in Asia, Eastern Europe and South America “has created new markets that were unimaginable in their scope and buying power a decade ago.”
There are still more than 100 countries with lower labor costs than either the U.S. or China, Steiner calculated.
“In an open market based on principles of free international trade, American companies will never be the cheapest, because of their labor costs. Therefore, those U.S. companies whose only survival strategy in an increasingly competitive marketplace is to “downsize” to compete on price will keep downsizing until they disappear.”
Inventive Thinking
Even introducing a “wow product” leaves manufacturers with the question, “What”s next?” Steiner noted.
How do small or medium size businesses compete for innovation? Kapro uses a product rather than market-focused strategy “systematic inventive thinking.” Instead of asking, “What problem exists in the market that needs to be solved?” S.I.T. asks, “How can this product evolve that hasn”t been thought of?”
In studying past wow products S.I.T. designers wanted to understand what thought processes were at play that led to advances, Steiner explained.
Kapro now has an idea bank “that will feed our new product introduction cycle,” Steiner reported. “Once a quarter we deal with one product at a time. Subsequently not a competitor has surprised us in the past six years. We anticipated every product introduced by a competitor.”
The Kapro board”s goal is that 20% of revenue comes from products less than two years old and the company has exceeded the target for six years. �2004 FastenerNews.com