Job shops encouraged to work together to land larger jobs
November 9, 2004
A new organization in Rockford, Ill., thinks job shops working together
is a MARRVelousidea.
It all started last year when Paul Sommers of the University of Washington gave a speech at Rock Valley College, Rockford, Ill., about the Italian model and its significance for regional planning in market-oriented economies. This concept illustrates how companies in a region can work together as one unit for various business projects, and this was a concept that piqued local manufacturers' interest because it offered them a way to get more manufacturing business into the Rockford Area.
Shortly after that the idea for the Manufacturing Alliance of the Rock River Valley (MARRV) was born.
This organization is designed to act as a virtual company for large customers, such as Boeing, Lockheed Martin, and Caterpillar, to turn to when they need complete assemblies made. From there MARRV will take the customer's order and find all of the local fabricators and manufacturers necessary to complete the job.
In essence, this not-for-profit association will act as a contract service provider to find companies that can work together on a large project. Companies will be chosen from a five-county region surrounding Rockford.
"The idea is to go after contracts too big for one manufacturer," said John Lanpher, an adviser to MARRV and a lawyer with Lanpher, Shappert & Associates, Rockford. "Companies that could do the entire assembly come together as a one-stop shop for the purchaser."
|Rock River Valley Manufacturing Capabilities|
CNC and Manual Precision Machining
CNC and Manual Fabrication
Industry Cluster Groups
In an area that's lost more than a quarter of its manufacturing jobs—nearly 14,000 since 1995, according to the U.S. Department of Labor's Bureau of Labor Statistics—the mindset of manufacturers needs to change, say some local fabricators and manufacturers. That's where MARRV comes in.
"Manufacturing companies have to change the way they approach marketing," Lanpher said. "The big companies are looking for a one-stop shop, and manufacturers have to look to their competitors as partners in getting jobs they've never gotten before."
"There has to be a new model," said Mike Molander, an executive officer for the organization and vice president of technical services for L/J Fabricators, a Rockford-based laser and metal fabricating company. "We're realizing that we're having tremendous success in how we look at our competitors."
Chris Johnson, sales manager for L/J Fabricators, agrees that manufacturers need to reinvent themselves.
"We need to reinvent ourselves; find new ways to market," he said. "Instead of looking at everyone else as competitors, [we need to remember that] we're all in this together."
Johnson believes that the loss of manufacturing jobs in the area is propelling people to network and build a little camaraderie.
This attitude is part of a more recent trend in business, one business owner believes.
"You will find a generational divide. People who are in business more recently are open to this," said Thom Shelow, president of Superior Joining Technologies Inc., a Machesney Park, Ill., GTAW fabrication and repair company. "People in previous generations who taught us, industrially, believed that their shops would handle all of the businesses, and if they couldn't, they didn't want the job. And that's terribly less efficient."
Today many job shops focus on their core competencies and find complementary services to offer to their customers. This line of thinking, Shelow said, is more common now, and has been useful for his company for several years.
Shelow said his company has practiced this concept for years by working with other local manufacturers to help meet its customers' needs. This undertaking and organization can be costly to facilitate for a small manufacturer, so Shelow sees the benefit in having an organization dedicated to handling the project management of larger, multicompany jobs so each shop can focus on its part of the work.
"We are like a microcosm, on many projects we have, of what this program will be," Shelow said of his company. "With this network concept, we would expand that and have the alliance handle the outsourcing."
Greg Lamm said that for shops like his, too, MARRV could prove to be an extension of a neighborhood-type mentality in which companies share work.
"I send work to all kinds of shops, competitors included," said Lamm, owner of Precision Micro Welding Inc., Loves Park, Ill. "We need to get past this "I've got a secret' and "I'm the hottest thing you've ever seen' mentality. I'm good, but I know there are other people who are good at things too—get them some work too. It's that kind of mentality that will keep work in our region."
Because MARRV is in its infancy, many steps lie ahead for the organization to make it successful.
The organization needs to finalize its message and how it's going to work together as a virtual company to figure out how they'll cooperate with possible customers. This basically requires finding out if the customer wants something done as an assembly, bringing together companies to make that assembly, and cooperating with competitors to share a purchase order.
As a business owner, Lamm emphasizes that each company needs to be treated fairly for this plan to work.
"My concern is that we're given a fair shot at the quoting," Lamm said. "I don't want it to be a small network. I like the basis of it, but it needs to include everyone."
Shelow sees MARRV as an opportunity for the companies involved to gain a competitive edge.
"I expect to be able to quote [and] make proposals on jobs that we would not otherwise be able to handle in total here. So right away I'm expecting potential access to more work," Shelow said.
Because this type of model is successful overseas, Lamm said, it's even more important to manufacturers in the U.S.
"They're doing the same kinds of things in France, Singapore, England, Japan, and it's working for them," Lamm said. "We're competitors, but we're competing against China, and they're all working together."
And that's an important point, according to John DiGiacomo, MARRV adviser and director of the Procurement Technical Assistance Center at Rock Valley College. Companies need to remember that they have to be able to work together to make the organization succeed.
"For those people who want to do business, they have to look outside the box and start thinking of our community as a network of businesses working together," DiGiacomo said. "You can't be the Lone Ranger anymore."