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Manufacturing a Competitive Advantage

By Jill George, Ph.D.

Jill George, Ph.D

The slide toward becoming a commodity sends chills down the spines of manufacturing executives and causes their teeth to grind. Why? Because if your business is slipping into commodity mode, you tend to lack competitive advantage, and that spells slow growth with low profits and customers who struggle to see the value add—the exact opposite of the double-digit growth in five years or less that many manufacturing executives are aiming for.

Hungry execs looking for growth search for any competitive advantage they can find. Yet, most fail to see the key component of the strategy that they need to adopt most. Recently, I met with a group of manufacturing execs from a large industrial manufacturing company who wanted to outpace growth in their industry—a common story. What is uncommon about them is that they have found the key component to their competitive advantage, a component that most execs miss. In our meeting, they astutely said, “We have a reputation for being high quality in our customers' eyes. But we can’t find ways to do more than sustain that competitive advantage, and we are slipping in some of our businesses. We want leaders who can take us into the next era of growth, so we are adding ready and prepared leaders at all levels to our equation.”

By their own admission, in the past, these execs had overlooked ready leaders as key to their competitive strategy. One of the most impactful and strategic ways to have a profound impact on your competitive advantage is through the quality of your leaders. Plants with higher-quality leadership win—across the board—in key competitive metrics. In DDI's Plant Leadership Series, a five-part series presenting findings from the MPI Manufacturing Study (2014), manufacturing plants with higher-quality leadership are more efficient, productive, and better at engaging their workforces than plants with lower-quality leaders.

Higher quality leaders - higher return

Higher-quality leaders grow competitive advantage with higher inventory turn rates of 12.5–2.5 turns more than plants with lower-quality leaders. More turns are indicative of product running dock to dock more smoothly. Plants with higher-quality leaders are also more productive, reporting 12 percent more productivity in the last year than plants with low-quality leaders. And plants with high-quality leaders reduce annual employee turnover rates a full 50 percent lower than low-quality leaders. Clearly, high-quality leaders are a competitive advantage that continues to grow. What competitive advantage could higher-quality leaders give your growth strategy?

View all five of the Plant Leadership Series Infographics.

Learn how DDI’s Manufacturing practice can help you optimize your talent for the success of your business.

Jill George, Ph.D., is DDI's Manufacturing Practice Leader.

Posted: 12 Jun, 2015,
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