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1. Delaware Valley Industrial Resource Center
2905 Southampton Road
Philadelphia, PA 19154
Tel: (215) 464-8550
Fax: (215) 464-8570
www.dvirc.org
Where to Focus Now in
Manufacturing
December 4, 2008
2. November 20082
Who We Are
DVIRC is an economic development organization
established in 1988 focusing exclusively on the Small - Mid-
size Manufacturing Enterprise (SME) community to grow
business value in three key areas:
• Consulting Services
• Talent Development
• Financial Services / Growth Capital
3. November 20083
The DVIRC Vision
Our Vision:
To see our region become an internationally
recognized leader in manufacturing competitiveness.
Our Mission:
The DVIRC focuses exclusively on the region’s
manufacturing community to grow business value through
consulting services, talent development and corporate
finance/growth capital. We believe growing business
value improves the standard of living and quality of life for
those who live and/or work in the region.
4. November 20084
Measurement of Success
• Completed over 2500 projects with over 1200
manufacturers
• Consult with 175 manufacturers each year
• ISO Certified 9001:2000
• Last year alone, we assisted our clients generate over
$113,000,000*
• 4.8 out of a 5.0 ranking in Customer Satisfaction*
• Over 1,000 Lean Certification/Lean Champion Graduates
*survey conducted and produced by Synovate - a leading market research company
5. November 20085
Our Market
• Pennsylvania has the 17th largest economy in
the world representing $510 billion in Gross
State Product in 2006.
• Pennsylvania’s manufacturing represents over
$70 billion in Gross State Product in 2006.
• Our market consists of approximately
4,700 companies employing over
160,000 people, primarily in
Southeastern Pennsylvania.
• We have worked with clients
on 3 different continents.
6. November 20086
Our Focus: Growing Business Value
Business Value
• The most important business metric - the value someone is
willing to pay for a business, even if your not currently selling
your business
• A metric ALL owners should focus their limited resources /
investment dollars on toward value building activities
Components of Business Value
• Management, Management, Management
• Quality and Sustainability of Revenues and Earnings
• Market Position and Environment
• Capital Requirements Relative to Cash Flow
• Quality of Systems and Controls
7. November 20087
Our Focus: Growing Business Value
DVIRC believes Business Value is achieved through:
Top Line Growth
• Actions taken to increase a company’s gross
sales revenue
Bottom Line Improvement
• Actions taken to reduce costs by improving
operating efficiencies
Trusted Resource
• Actions taken to connect enterprises with the
right network and/or information
8. November 20088
Manufacturing Current State
Business Outlook Survey by Federal Reserve Bank (November 20th
):
• Decrease: Employment, Shipments and New Orders
• Decrease: Input Prices & Output Prices
• Decline: Continued Business Conditions
DVIRC State of Manufacturing Survey (November 14th
vs. October 14th
):
• Decrease: Projected Sales Growth (44% respondents vs. 27%)
• Increased: Account Receivables Days Outstanding (72% respondents vs. 61%)
Decline: Cost of Raw Materials (44% respondents vs. 28%)
DVIRC’s December 12th
State of Manufacturing Survey is now open for
participation?
9. November 20089
Where to Focus Now in Manufacturing
Top Line Growth: Short term activities.
• Increasing customer and prospective customer touches immediately – all
hands on deck
• Step up precision on sales reporting activities – weekly contact by contact
reports by sales force etc.
• Pricing/overhead allocation – make sure your pricing model is accurate and
you know how much you can give to keep a customer or gain a new one
• Refresh all staffs understanding of your brand, products and your value
equation for your customers
Create sense of urgency and communicate effectively to your employees what
is at stake and how you need all of them to help during this time.
10. November 200810
Where to Focus Now in Manufacturing
Top Line Growth: Mid to Long term activities.
• Exporting – if currently doing it, do more of it, if not, start. Fact: those
companies exporting are growing faster, are more profitable and innovative.
Annual demand increase for manufactured goods:
10 – 15% World Market
3 – 5% US Market
• Government Procurement – the largest buyer in the world is the US
government.
• Perform a marketing analysis to assess your current markets, potential
markets, competitive challenges, and new product opportunities.
11. November 200811
Where to Focus Now in Manufacturing
Bottom Line Impact: Short term activities.
• Split all planned expenditures into two groups, essential and non-essential –
shelve the non-essential for now to reduce expenses and conserve
cash
• Step up activities collecting accounts receivables
• Promote slow moving inventory to convert to cash
• Lean methodologies
• Establish Key Performance Indicators – vital signs
Create sense of urgency and communicate effectively to your employees what
is at stake and how you need all of them to help during this time.
12. November 200812
Where to Focus Now in Manufacturing
Bottom Line Impact: Mid to long activities.
• Establish a formal lean team effort to systematically reduce waste in your
organization
• Determine areas of weakness in the components of your business value
and focus your limited resources on improving those weaknesses.
Business value is your most important metric, after all is it what someone
would be willing to pay for your business.
13. November 200813
• Strategic Action Plan
• Succession Planning – Leadership Transition
• Lean
• Human Resources
• Business Process / Information Technology
• Quality / ISO
• Market / Sales / New Product Development
• Internet Marketing, Search Engine Optimization
• Institute for World Class Manufacturing, Education, On-site
Training, Certification, Plant Tours
• Network Groups: Manufacturers Executive Council; CEO Forum
Consulting Services That Drive Business Value
