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Small manufacturers often feel smacked around, but if they play their cards right, their size as a member of a larger team gives them an agility they can use to compete globally. This corporation has long been known for financing equipment and making minority capital investments in small manufacturing concerns – usually its suppliers or those of affiliates. Acquisitions have now become the norm and are strategically integrated in its present business plans. The reality is that it's getting to be materially near impossible for small manufacturers to survive. Not without good cause, these companies see globalization as a threat, and have few options other than to constantly retrench and try to slash prices to compete. Each such protective practice means that in no uncertain terms, they are going to lose their place in the supply chain in coming years. Traditional supply chains are morphing under the pressure of a globalizing economy, a stubborn or compelled adherence to old supply chain rules is tantamount to a purposeful design to put the businesses in jeopardy. “Adapting to new rules is a mandate for survival” says Manual Garcia, director of strategic planning at Falken Industries Ltd OTC : FLKI. But the future holds a favorable prospect by joining a conglomerate known for its friendliness to the independent entrepreneurial management concept of its affiliates. This global corporation is forging new partnerships and enhancing its global value chain. This is far from a dire warning of apocalypse, rather it is a different thought – operating independently within a group and benefiting from the synergies. It is a guide to navigating and carving out a piece of the new and perhaps strange terrain of a global supply chain. The secret is of course the new partner’s sudden access to resources certain to keep innovation alive in every part of its business -- products, workforce, strategy, etc. But the whole of it does much to painlessly integrate the effort of being part of the global economy and benefiting from the opportunities those challenges provide. Pressured by global competition ? It is no material effort as an affiliate of this group to expand sales overseas. Constantly underbid ? Benefit from economies of scale from centralized purchasing and procurement. Being a part means to effortlessly overhaul the shop to a "lean" manufacturing model without giving up managerial control. Above all else, small manufacturers need to use the advantage their size provides within the context of a larger whole. Small companies operating within the group have the agility to react quickly to new market demands -- for military needs or green products, for example. Credibility is also a key issue. Larger companies often prefer working with small suppliers because they are the ones coming up with new solutions and products and are willing to be flexible partners rather than simple suppliers - all the more so if the adequacy of resources is satisfied by membership in a larger whole. By way of illustration, a company that made its name building one thing, suddenly can provide hundreds of products, participate in worldwide tradeshows, benefit from customer contacts responding worldwide. Being acquired only makes good sense for a small manufacturer, it will suddenly expand its market and sell worldwide.
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