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How U.S. Manufacturers Can Compete Globally

Updated on October 30, 2012

The economic recession has hit a lot of businesses hard. This is certainly true in the manufacturing industry. Factories that produce products for many different industries have started to cut back their employee’s hours or shut down entirely. They simply can’t stay afloat during a time when people aren’t buying as many of their products as they used to. This is made more difficult by the fact that manufacturers in other countries can offer products at a much cheaper rate than U.S. manufacturers can. Luckily there are some things that manufacturers in America can do to reduce the problem and there are several other groups of people who can help.

People Are Looking For Deals Right Now

The biggest problem is that the economy is forcing everyone to try to get the best deal. Businesses that might have previously been willing to pay a few extra pennies to work with an American manufacturer are now looking at getting their products from developing nations in order to save some money during these tough times. This makes it difficult for American manufacturers to stay in business since they’re losing their customers to places that can afford to keep their costs lower than U.S. businesses can.

What U.S. Manufacturers Can Do About This

There are a few key things that manufacturers in the United States can do to try to compete with global businesses during this time. Those things include:

• Keep costs as low as possible. To do this, it is important for the business to review the different ways that it can keep costs down. The American business doesn’t simply have to cut back on labor costs. It also has to look at all of the different ways to reduce the cost of supplies and shipping and to keep prices low for consumers. This may include using non-traditional methods of shipping (such as ports to ship by boat instead of air shipping with planes) to reduce total expenditures by the company. It may even include taking a hit on profits to pass on a deal to customers. This isn’t an easy decision to make but if it keeps the customers coming back then it might be worth it during the recession.

• Encourage customer loyalty. A key thing that manufacturers must do right now is to develop and grow the relationships they have with customers. Customers that feel a connection to the business will feel a sense of loyalty to help them stay in business during these tough times. Customer loyalty can be encouraged through offering deals to repeat customers, providing incentives to customers who bring you new business and working to add that extra personal touch when dealing with customer service and / or tech support issues.

• Promote the fact that you’re an American business. A lot of people just aren’t thinking right now about the value of supporting the American economy. Instead, they are thinking about their own savings accounts and how to get the best deal. That’s why outsourcing is popular with people. If you promote the fact that you are a U.S. manufacturer then you can help to remind people of why it’s important that they support local businesses. There are a lot of good reasons to buy American; you just have to remind people of what those reasons are.

• Specialize in a certain area of manufacturing. The main advantage that developing nations have in the manufacturing business is their low cost of labor. The main advantage that we have in the United States is the ability to produce machinery and products that are highly specific to certain industries (such as the medical industry) and which may require a higher standard of construction than other products do. Manufacturers in America that make at least part of their business off of this type of specialization will be able to compete better than those businesses which don’t do so.

• Stay flexible. Overall, it’s just really important for manufacturing businesses today to stay flexible about how they’re going to keep costs down and keep customers interested in working with them. Creative solutions are going to be the ones that actually produce results so engaging in out-of-the-box thinking is important.

What Else Would Help

Manufacturers can do a lot of things to help level the playing field so that they can compete in the global manufacturing industry. However, it would help a lot if they got help from these three key areas:

• Government. If the government offered incentives and assistance to American manufacturers during these tough times then it would be possible for these businesses to stay active. This is useful to the nation since it keeps workers employed; unemployment rates are already far higher than they ought to be!

• Other small businesses. Businesses need to support one another in the effort to keep work in the United States. Manufacturers work with distributors, suppliers and merchandise retailers. If these people make an effort to continue working with American manufacturers in spite of some of the financial benefits of working with manufacturers in developing nations then everyone will be able to weather the storm a little bit better.

• Consumers. Consumers have to do their part to try to purchase products that are made by U.S.-based manufacturers. This allows those retailers and other small businesses to stay motivated to keep working with American manufacturers.

In other words, it’s everyone’s responsibility to do their part if we have a concern about keeping manufacturing jobs available to people in the United States.

Comments

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  • profile image

    Rashmi 

    4 years ago

    I got into this article which seprrisus me since this isn't one of my interests. You did such a good job of presenting your facts that I couldn't stop reading.

  • RetailRich profile image

    RetailRich 

    6 years ago

    There is certainly a lot of abuse and waste in large corporations--just like the federal government. The difference is that I voulantarily choose to buy products and the government takes the dollars from me and then wastes it. Large corporatoins have a distinct disadvantage out there when it comes to survival and growth. The governement continiues to layer on more and more regulations, which other companies of the world do no need to obey. US coporations also pay more taxes now than in any country on the earth. Aside from cheaper labor costs over seas, they've got to deal with more taxes, and more regulations. Somethings got to give somewhere, and it eventually catches up in the form of sales. Sure government needs to regulate for things like safety, but they should NOT be deciding where or if a company builds a plant in another state. Our government should be encouraging business growth, not deciding at every opportunity how they can restrict, regulate and tax!

  • profile image

    Angelface 

    7 years ago

    Very interesting and thought provoking hub! Manufactures work hand in hand with business finance companies like OfferMaxFunding.com by selling invoices and credit card sales for cash flow for payroll and expansion instead of waiting months for payments that stunt business growth.

  • profile image

    Online Medical Transcription 

    7 years ago

    I came across your article today and thought it was quite interesting.

  • LeanMan profile image

    Tony 

    8 years ago from At the Gemba

    Global competition is exposing our companies to a very un-level playing field, the likes of China have very low wage and other costs as well as incentives for us to outsource our production there... Not at all good for our jobs in the west, especially with big businesses eyes always being on profit!!

    Read some of my recent hubs on Lean Manufacturing where I am starting to explain how businesses can make massive savings in their operations and keep production here in the west!

  • juneaukid profile image

    Richard Francis Fleck 

    9 years ago from Denver, Colorado

    I very much enjoyed reading this article. You have solid advice here. I wonder what advice you would give to the book publishing industry in America. So many small but reputable presses have cut way back including university presses. Any advice here?

  • profile image

    propeshka 

    9 years ago

    Perhaps an even more important point of order is for American manufacturers to hire the best engineering talents globally. Using their knowledge of tools, automation, and efficiency can make a big difference in making a tool well and in reliable & vast quantity.

  • JYOTI KOTHARI profile image

    Jyoti Kothari 

    9 years ago from Jaipur

    Hi Kathryn,

    You have supplied valid points but do you think America, leader of globalization should act as conservationist?

    America hatched on its own feet by giving China status of MFN. Chinese manufacturers took the advantage and out placed American manufacturers.

    I have written some hubs about these facts.

    thanks,

    Jyoti Kothari

  • bala99 profile image

    Bala Subrahmanyam Vishnubhotla 

    9 years ago from Hyderabad, Telangana, India.

    American Inc. need to get off their butts and get their brains to work. You have given the direction. A very logical plan.

  • plasticsman profile image

    plasticsman 

    9 years ago from United States

    Nicely written ! I really enjoyed finding someone who writes about the manufactruing business. Any ideas having to do with boosting the Industry is well needed. https://hubpages.com/education/A-Guide-to-Plastics...

  • Dolores Monet profile image

    Dolores Monet 

    9 years ago from East Coast, United States

    It's nice to see that someone is thinking about what can be done instead of what can't be done.

  • RVDaniels profile image

    RVDaniels 

    9 years ago from Athens, GA

    Thanks for an intelligent and well thought out hub. It's so pleasant to read something with substance and not just something to catch the seo spiders attention. Well done.

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