Specialists in Manufacturing

August 22, 2022

Looking to perfect one area of one sector of one industry can reap positive rewards. This can be seen across the globe, where companies that have specialized in making or selling a very select service have thrived, specifically because they are the best in their very limited product offering.

These specialists come in two types: Niche product provider and Customer-type product focus.

• Niche specialists focus on a specific product. They will make this product better than most any diversified company. For example, a coating company or a firm that specializes in wrapping cars but does no other body work or paint.
• Customer specialists focus on providing service to a specific customer market. They are more like a partner, providing insights into their chosen industry and knowing the ins-and-outs of dealing with that market. For example, a manufacturer that supplies aerospace companies or an insurance company that only deals with motorcycles.

In manufacturing, this is not news. You can probably lose count of the number of specialized subcontractors that you know about. Companies that specialize in coating, laser cutting, finishing, packing, etc.

Spotting a Specialist

There are 5 key things that specialist companies do to be leaders in their field and maintain their competitive advantage:

Specialized Knowledge

A manufacturing specialist will show and maintain specialized knowledge in their market. They will have stronger insights into that market, often with a better understanding of regulations, technical specifications, service capabilities, or installation requirements than their diversified competitors. This gives them an advantage by knowing more than the competition, but often knowing more about than their client. It is a value sale that gives them a position as more of a partner in their client’s future venture and shows the client that if the cost is higher, it is because you are paying for better.

Selective of Customers

There is always an interesting sense that you can get from a salesperson that will recommend a different supplier to you. That is the mark of a true specialist. They could make the sale, but as your prospective partner, they would prefer to refer your business to a better supplier this time, as their speciality is just outside their comfort zone.

Value-Based Sales

Related to the last point, a specialist isn’t trying to sell you a product, at least, not at first. You could even say that a clear sign that you are dealing with a specialist that understands your business is that they don’t try to sell you anything in the first few meetings. Their first goal is to confirm that you are a suitable customer for them. They will ask questions to understand your pain points. Only when they are sure that they are a good choice will they discuss your future partnership. This also makes procurement departments a natural enemy to the specialist as they are not competing on cost but on value. Instead, they need direct meetings with affected departments to help you understand how they can help you.

Leveraging Partnerships

The specialized provider will have a network of collaborators, suppliers, and other companies that they can refer to. Their own ecosystem of business connections and competitors. These collaborators will have a mutually beneficial relationship with the specialist, with business being referred to one another, based on client suitability. They do this to ensure that their clients have the best product and service.

Focused Expansion

A specialist will understand when and where to expand their operation while dodging the temptation that comes from similar products, services, or markets. They will understand that even if they have customers urging them to foray into new fields, that they aren’t something they are equipped to deal with. Often, they will understand that advancing requires a difficult investment in human capital that is either difficult to acquire or difficult to rationalize on the longer term.

Conclusion

Being a specialist comes with its own set of advantages, like a smaller but specialized workforce, or more referral business. Using your specialist suppliers can come with it’s own set of issues, like tracking orders, or sending and receiving shipments.

OnRamp ERP offers a better way to track your subcontractors, the routing steps that you need them to perform, the orders you have shipped to them and received, and the invoiced amounts for your subcontract vendors.

And for specialized manufacturers, OnRamp ERP is a full-featured ERP that can help you with everything from quote to cash.

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