Monday, June 30, 2008

How Manufacturers Will Survive

Here’s a powerful story from PROFIT Magazine that illustrates the journey many (if not most) Canadian manufacturers will have to make to survive in today’s competitive global economy.

Peter Hart runs a company in St-Laurent, Que. called Rideau Recognition Solutions. It started out making custom jewellery and promotional merchandise, but by the 1980s it was clear that Canadian manufacturing would become a dying art.

To survive, Rideau adopted a new strategy based on the highest value it provided to its customers. It`s now become a hybrid manufacturer and service supplier specializing in employee- and customer-incentive programs.

As Eleanor Beaton wrtes in the June 2008 issue of PROFIT, ``No longer would he sell only corporate gifts to order; he’d sell a turnkey recognition system that would encourage customers to stick with Rideau."

That change has helped Rideau rank in the Top 200 of Canada`s Fastest-Growing Companies for the past three years.

There's lots more, but you will have to click here to read the rest of the story.

The lesson: your greatest asset is not the product you make, or how you make it. It's the relationships you have with your customers and how well you understand how to solve their problems.

1 comment:

Promotional Pens said...

i thought this was interesting:In 2001, Rideau plunged head-first into its own technological revolution, developing its rewards-management software in-house. Since then, it has spent millions on IT; today, one-fifth of its 210 employees are programmers. “We became bigger than most Web developers,” says Hart.

Although Rideau still sells promotional products such as recognition medals, its online rewards systems represent 94% of its business. Now, a client such as Boeing can track multiple recognition programs involving thousands of people with a daily download of information from Rideau. “Even today, we’re spending millions,” says Hart. “When this economic downturn is over, we’ll be really well placed and able to maintain the competitive advantage we’ve always had.”

Moving Rideau’s programs to the Web also opened its door to multinational clientele. Since 2003, its export sales have grown from 3% to 45% of total revenue. What’s more, in tracking and recording the performance of thousands of employees around the world, Rideau has developed a “deep and well-founded expertise in employee performance,” says Hart. He hopes to parlay that expertise into performance-management software for HR departments — more evidence that the best kind of transformation never stops.