Survival Of The Fittest

A Look Ahead

Despite the challenges facing entrepreneurs in the manufacturing field, there are many bright spots on the horizon. Recognizing the importance of the small manufacturing sector to the economy, the federal government created the MEP, a partnership between private industry and state governments, to help small and midsized firms remain viable. The effort consists of establishing nonprofit centers that help link entrepreneurs with the resources they need to modernize.

According to Russell, every state has at least one center, and some have more. Most locations provide their services at a reduced cost.

The Delaware Valley Industrial Resource Center (DVIRC) in Philadelphia is one MEP center that was instrumental in helping Interconnect Systems Group Inc. find a computerized accounting system. Interconnect founder Walter Schroth says the new system was essential to helping his 11-year-old firm keep pace with the high-tech computer industry.

"We were shoehorning our accounting package to fit our needs and, consequently, doing a lot of extra work, which was very inefficient," says Schroth, whose Exton, Pennsylvania, company manufactures a standard wiring system for computer systems. "DVIRC did an extensive survey to find out what our computer and software requirements were, then selected from about 20 packages that accommodated things we were looking for. They made recommendations and also looked at it from a budgetary point of view. And once the package was selected, they helped us with training on the software."

Although many small and midsized manufacturers are trailing in terms of implementing advances, some are forging into the future via concepts such as virtual companies and agile Web manufacturing. Similar in theory, these two concepts revolve around the idea that a group of individual firms with distinctive specializations can join forces when necessary to bid on specific contracts, then break apart once the contract is over.

"In 20 or 30 years, I think you'll see more of the virtual factory through greater use of the Internet," speculates Dick Brown, a 23-year manufacturing veteran and director of industry applications for J.D. Edwards World Source Co., a manufacturing software developer in Denver. "Somebody in a little house is going to have an idea to make something. They'll put the project on the Internet; someone else will pick it up, design it and put it back on the Internet, where another individual with the technology to make the part will do so. Then someone with the sales capability will see it and think they can find customers, while another person will come in to do the distribution and delivery."

But this is still far down the road, and before small manufacturers can evolve to this point, the experts agree most still must learn to keep abreast of a rapidly changing industry by innovating instead of imitating.

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This article was originally published in the September 1997 print edition of Entrepreneur with the headline: Survival Of The Fittest.

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