Chirch Global® Manufacturing, LLC Releases White Paper, "Escaping the Commodity Trap"
Chirch Global Manufacturing, LLC
1150 Ridgeview Dr.
McHenry, IL, 60050
Press release date: July 9, 2013
If the parts you are manufacturing are becoming less specialized, and your manufacturing sale prices are pushed continually down, then there is a good chance you may end up getting stuck in the Commodity Trap. Chirch Global Manufacturing shares some useful ways to avoid this in their white paper, “Escaping the Commodity Trap - a common mistake in Manufacturing."
In economics, a commodity is used to describe a class of goods for which there is demand, but which is supplied without qualitative differentiation across a market. What this means is that no one can tell who is supplying the commodity, such as a metal stamped bracket, making price the only real difference.
“If you’re quoting on a new part, and you’re asked to guarantee a price reduction each year, and yet your manufacturing costs are more competitive than your competition – that’s a sure sign you’re being setup for a trap.” – Jeremy Hahn, Chirch Global Manufacturing.
Here are a few ways Chirch Global Manufacturing showed to add differentiation to a part or manufactured good:
Be Responsive and Help Reduce Lead Times
In manufacturing, lead times get pushed and pushed; it’s just the nature of the beast. Anyone can stand by their quoted lead times and supply a given part. If you can help to reduce lead times and communicate quickly during times of trouble, it will add differentiation to your process.
Add a Dimensional Report in with your Quality Checks
Even if it is not required, make sure to add a dimensional report with your parts (similar to a level 2 PPAP). More often than not, it’s the easier parts that have simple quality mistakes, as some operators see them as so easy, they cannot make a mistake. Adding a dimensional report will not only eliminate mistakes, but add value by showing your customer you’re going above and beyond as a supplier, helping to separate you from your competition.
Find Specialized Parts that are not Generic
If a part is more specialized, it may require your technical expertise to help suggest improvements with making the manufacturing process run easier. What may seem simple with what you do day in and day out may still be a mystery to others. Anytime you can add value to a process, will help prevent others from easily making the same thing. This is one of the best ways to avoid being stuck in a commodity trap.
These may all seem like common practices, but more often than not, companies are overlooking ways to differentiate themselves from the pack. By standing out a little here and a little there, you can quickly show your customers you add value to all of your products. Show them you’re not just supplying a commodity that can be easily replaced.
About the Company:
Chirch GlobalŪ Manufacturing, LLC is one of fourteen companies that make up the Chirch Global Manufacturing Network. With a wide variety of manufacturing solutions available, this Network can be a single source service provider for just about any type of manufactured parts or assemblies you may need. Learn more at http://www.ChirchNetwork.com.