Georgia Manufacturers Succeed on Change

Barbara Kieker

Thursday, May 26th, 2011

Output from U.S. factories rose in March for the fifth straight month and consumer confidence as measured by the Thomson Reuters/University of Michigan preliminary index increased. Georgia manufacturing is also on the upswing as companies operate with an increasingly positive mindset, according to Art Ford, Regional Manager for the South Region of Georgia Tech’s Enterprise Innovation Institute.

“Most companies we’ve dealt with recently that survived the recession are improving,” Ford said. “Even the recent increase in oil prices has not changed what companies are doing long term.”

The Georgia Tech has the largest and most comprehensive university-based program of business and economic development assistance in the United States. Its overall goal is to help enterprises of all types and sizes use science, technology, and innovation to improve their competitiveness and profitability. Ford works primarily with manufacturers located in southern Georgia, seeking to increase production capacity or develop new products, processes or technologies.

Targeting efficient growth

Ford agrees with economic experts who are forecasting a slow but steady economic recovery. Inquiries from companies seeking help from Georgia Tech with expansion or innovation plans are up slightly in first quarter 2011 compared to first quarter 2010 and about flat compared to fourth quarter 2010.

According to Ford, companies that operate in a well-defined niche are doing well. As consumer confidence grows, it typically translates into increased demand.

“Most companies had to reduce staff and get more efficient to survive the recession. Now they are trying to figure out how to meet increased demand while maintaining that efficiency and adding fewer jobs than in the past,” Ford said.

In addition, Ford observed, “with the current value of the dollar, many companies are looking overseas for market opportunities.”

Finding security in change

Georgia Tech conducts a bi-annual survey of manufacturers in Georgia that has yielded several insights. In 2010, the Georgia Manufacturing Survey, conducted by Georgia Tech, Kennesaw State University, and the accounting firm, Habif, Arogeti & Wynne, included almost 500 regional, national and global manufacturers that have operations in Georgia. Respondents ranked five business strategies by degree of importance, including high quality, adapting products to customer needs, low price, innovation and quick delivery. Companies that ranked innovation as the most important strategy had the highest profitability as measured by mean return on sales.

“People and knowledge move so quickly today that it is harder to maintain a competitive advantage. Companies that innovate and find new ways to create value are the ones that will be successful,” Ford reported.

“It sounds like an oxymoron but there is security in being able to change. Market leaders lose market share through attrition. Innovation is the way to be secure. If you’re not thinking about changing then you are likely to be left behind.”

Further demonstrating the importance of change, the survey indicated that 51 percent of the manufacturer respondents introduced new processes or significantly improved their efforts. Forty-two percent introduced new innovations in their manufacturing technologies and techniques on the shop floor.

More information about the Georgia Tech’s extension network, its biannual survey and programs to assist small businesses in Georgia is available at innovate.gatech.edu or contact Art Ford at art.ford@innovate.gatech.edu or (229) 430-6195.

About Barbara Kieker

Barbara Kieker is a freelance writer who writes on business-related topics for a number of web-based properties. She also provides communications services to Fortune 500 corporations, small businesses and nonprofit organizations.