13
Conclusions

First, what's a convergence? It's the coming together of people or ideas in ways that didn't happen before. And the challenging thing about this process is that when it happens, it always changes the rules of math. It causes one and one to make three. That is, the result of the convergence is greater than the sum of its parts. Especially when it involves the development of new technologies (Burke, 1999).

The specific recommendations in this report are the true conclusions of this study. Nevertheless, some salient conclusions pervade the report as a whole, and it may be useful to make them explicit here. Many of the recommendations are not new to SMEs. However, (1) the demands of supply chain integration, (2) reductions in the number of suppliers to OEMs, (3) changing product design technologies, and (4) the development of the Internet, e-commerce, and modern logistics methods are converging on SMEs (and the MEC/TRPs that support them) at an unprecedented pace. This convergence of multiple trends, coupled with unprecedented rates of change within these trends, is jeopardizing the competitiveness of many U.S. SMEs.

In the past, SMEs that failed to respond to changing trends gradually became less competitive. Today, SMEs may find, almost overnight, that they have been surpassed by global competitors and have lost critical customers. With limited resources and the increasing speed of events, they may be unable to respond. Thus, SMEs must be alert to rapidly changing conditions and respond while they still have a business, some



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Surviving Supply Chain Integration: Strategies for Small Manufacturers 13 Conclusions First, what's a convergence? It's the coming together of people or ideas in ways that didn't happen before. And the challenging thing about this process is that when it happens, it always changes the rules of math. It causes one and one to make three. That is, the result of the convergence is greater than the sum of its parts. Especially when it involves the development of new technologies (Burke, 1999). The specific recommendations in this report are the true conclusions of this study. Nevertheless, some salient conclusions pervade the report as a whole, and it may be useful to make them explicit here. Many of the recommendations are not new to SMEs. However, (1) the demands of supply chain integration, (2) reductions in the number of suppliers to OEMs, (3) changing product design technologies, and (4) the development of the Internet, e-commerce, and modern logistics methods are converging on SMEs (and the MEC/TRPs that support them) at an unprecedented pace. This convergence of multiple trends, coupled with unprecedented rates of change within these trends, is jeopardizing the competitiveness of many U.S. SMEs. In the past, SMEs that failed to respond to changing trends gradually became less competitive. Today, SMEs may find, almost overnight, that they have been surpassed by global competitors and have lost critical customers. With limited resources and the increasing speed of events, they may be unable to respond. Thus, SMEs must be alert to rapidly changing conditions and respond while they still have a business, some

OCR for page 108
Surviving Supply Chain Integration: Strategies for Small Manufacturers resources, and the time to do so. Many SMEs will require increased assistance from MEC/TRPs to respond effectively. From a different perspective, this convergence has created unprecedented opportunities for suppliers from low-cost areas of the world. With reduced trade barriers, access to technologies and modern management methods, increased training in English, better educated and more skilled workforces, easy access to the Web to advertise their products, learn about competitors, and bid on jobs all over the world, and the availability of overnight delivery, they can now compete with SMEs in the United States in terms of cost, delivery, quality, service, technology, and all of the other requirements of integrated supply chains. To respond to these converging challenges, U.S. small and medium-sized manufacturing enterprises must, at a minimum, take the following key steps: engage in meaningful strategic planning, not just budgeting increase their financial, managerial, and technological strengths add value to their products and integrate more closely with their customers integrate their own supply chains to reduce costs and improve performance These responses will not, by themselves, ensure competitiveness, but they are essential for the successful participation of small and medium-sized manufacturing enterprises in modern integrated supply chains.