The traditional approach, more or less

As each year ends we observe some traditions — familiar, frustrating, restorative. Not all are welcome, but we wouldn't put ourselves through these routines if they didn't have some value, so think of annual reviews as a year-end tradition.

I'm glad to report that our annual Business Outlook survey breaks recent "tradition" by revealing some hopefulness among forging executives. Most of them confirm that 2004 has been a better year than 2003 — and that 2005 looks to be even better. They've identified the problem areas but they're moving ahead with some ambitious capital investments in the coming year. They're planning new and modernized forging systems, training programs, heat-treating furnaces, and material-handling equipment — all of them significant and worthwhile outlays. What's most encouraging is the optimism projected by these results. Our respondents see problems, but the past year's achievements emerge as a prologue to next year's bigger plans. "Hope is not a strategy," military experts say, but it is an invaluable character trait. It's commonly found in the people we regard as good leaders or visionaries, the people we want heading the forging industry.

So, in that spirit of boldness I'll undertake another year-end tradition, forecasting. Here's a bit of insight that could be foresight: Web-capable forgers will be the most successful at overcoming the industry's ongoing problem with foreign competition. By perfecting the skill of locating customers, designing products, and delivering customized orders, all online, they'll overcome the disadvantages of domestic manufacturing costs and open new consumer markets.

Our respondents indicate some progress toward that wired future: 90.0% of them use e-mail; 78.0% do online research; 36.0%, procurement; 48.0%, e-commerce; and 6.0%, enterprise management. These figures are too low, however, and even less encouraging is that they are almost identical to the results of the 2004 Outlook.

I attended a presentation recently about Web-based marketing by mediumsized and smaller manufacturers offering custom design and production services to OEMs, including Tier One automotive suppliers. These manufacturers are foundries, injection molders, roll formers, extruders, wiremakers, almost everything except forgers. That's got to change. (If I'm wrong, if I've overlooked your Web-based effort, let me know. You've got a story to tell.)

Of all our survey respondents, just 22% use computer simulation to plan their production of forged parts. Those who do not use simulation say they lack the personnel to do it effectively, or that the cost of computer simulation is too high.

Every explanation is a good one until someone comes along with a better one. You may be satisfied that you're doing something as well as possible, until someone shows how it can be done better. Forgers need to to challenge their reasons for doing things the way they do them. They need to adopt ideas and practices that until now have seemed impossible, or unfeasible, or unnecessary.

I hope you come away from your own year-end review satisfied with 2004, and ambitious about next year. And, I hope your 2005 plan makes next year's annual review a welcome tradition.

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