Notice that we didn’t ask who else can do what you do. The question here is what else can do it. The difference of a few letters means the world. When you are asking who else can do what you do, you are talking about your competitors and we traditionally think about companies that are set up like we are. If you are a hospital, you would look to other hospitals. If you were an auto-manufacturer, you would look to other car builders.
That all changed this week. Kaas Tailored, a furniture manufacturer in Seattle, Mukilto, spent a few days (days!) figuring out how to rework its processes from wood building to sewing masks for the Seattle area Providence St, Joseph hospitals. Suddenly, the Personal Protective Equipment (PPE) manufacturers have a new competitor. Now, I don’t think that Jeff Kaas and his family are moving wholesale to surgical equipment, but he is iconic in how he pursued this.
Jeff and his team went further than production in this dramatically different industry. Think about the differences in the production processes around surgical masks and the cleanliness that is required there in contrast to the dusty areas around woodwork manufacturing. Mukilto worked with Providence St. Joseph to understand their needs and rapidly prototype masks that would meet the immediate and ever-growing demand.
He then made the engineering instructions available to anyone who wanted them. He encouraged other manufacturers to do the same. Jeff is creating and driving an entirely new industry model and serves as a primary example of Substitution of your products and services. When Jeff and his team made this quick decision, they shifted the model of every PPE manufacturer who had a lock on rising demand for their products and a corner on a very profitable industry.
So now, when I ask what else can do what you do, think about both who and how. Substitution can be clear. Buying a generic drug instead of the name brand drug saves money; some people don’t trust generics to work as well and continue to buy the more expensive thing that works. Women’s skin care products are regularly innovated by the most expensive European lines and then pushed out over the next months and years to the powerful players that you find in the aisles of Target and your local grocery store.
Substitution can come from an industry moving like we’re seeing in this time of crisis, but usually stems from your potential customer using something else instead of your product or service. At this time of year in the US, tax accountants are usually on full throttle getting tax statements prepared for individual clients and businesses. A substitution for that model is using a product like TurboTax instead or filling the tax form out by hand.
What things (products, people, companies) can your potential customer(s) use instead of buying what you are selling? How do these compare to what you sell and what are the price point differentials? In order to move forward, you really need to sell something at a price that makes you competitive with not just the players that you traditionally note as competitors, but also the things or companies that might be considered substitutions for you.
Only when you can say that you dominate in both of these areas can you claim that you have a firm chance at substantial and sustainable growth. Later on, we’ll talk about how this shifts over time.
In 2020, we are rolling out meaningful tools for manufacturers that are affordable, on-target and competitive. We are also expanding our educational offerings.
We believe in the critical importance of manufacturing right here in North America and we work hard to keep you working. Ask us questions; you will find that we are far more reachable than other software providers you may partner with. We are here to help you find the right tools and use them, whether it's a Google doc, an Excel sheet or a Production Control system. To learn more about meeting your targets for 2020 or just getting a question answered, visit us at www.cimx.com.