Whether we like it or not, most of us are being effected by Global Competition. Are you ready?   By Gary Shotton #000040

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Global Competition

By Gary Shotton

This text is in Extreme Rough draft and will be edited in the near future.

Hello. My name is Gary Shotton, and I’m sitting here in the city, or town of Pinehurst, North Carolina, home of the World-Famous Pinehurst Golf Course. Now, I’m not at that golf course. I’m in another smaller course, and you can see some small boys in the background. One of those boys in that background is my grandson who’s six years old, and he’s playing in the world championship of golf for kids, and of course I’m proud, but enough on that. The topic today is the Global Market, and how does that affect you. I’m going to introduce it by saying, in this tournament, there’s some thirteen, fourteen hundred kids ages 12 down to five years old. There’s some 45 states in the United States represented, but there’s actually 50 Nations represented in this tournament. So it’s truly a World Tournament, and in my son’s bracket of six years and under, he’s six, there’s actually 82 different golfers and 20 different countries represented. China, Taiwan, Brazil, Australia, you just name them. My point is, we’re in a global market, and you need to recognize that if you’re in business. You’re a little late if you didn’t recognize that. And frankly, I’m going to tell you where I’m about to miss it, because for the first 17 years of business ownership I had a service business, and it was a moving and storage where we moved furniture from house to house, and I had no even consideration of a global market because I was in the local service business. But, my last 10 years have been in manufacturing, and that is truly at risk of being a mobile market and me losing market share. Now, up until about a year ago, I felt very comfortable because I made the statements in terms that as long as I’m making metal parts for an industry, and my batch sizes are between 50 to 500 in a batch size, and I had the feeling that the global market didn’t affect me because I was in small batch sizes. But, reality comes that more and more this global market is affecting me, because I’m making these small parts, these component parts for a manufacturer that is selling globally. So if my manufacturer cannot sell globally, sell their products, their end user product, I can’t make parts for them and sell my parts to my manufacturer. It becomes a real issue, becomes a real issue because I’m starting to sense and feel that I’m losing market share to the rest of the globe. In particular, last year. I own a machine shop. I have a family of parts. That means I have parts that are the very similar parts, but there are four different pipe sizes in this case. So, I have some parts the same exact part, but it’s for a 4-inch pipe, 6-Inch pipe, 8-inch pipe, 10-inch pipe, 12-inch pipe, and the last three years I’ve had a wonderful part that was 10,000 parts a year in the 4-inch size. Guess what happened? My customer started looking around. I don’t think it’s right. I think it’s going to come back to me, but I lost a family of parts that are equaled 750 thousand dollars of my business from last year I do not have for this year. That hurts. They were not my highest profit parts, but they covered my overhead. They were a good part. They were an easy part because they were routine, and I had a choice to whether I could lower my price. I could continue to lower my price, actually lower my price to the point of not even possibly being profitable in order to save that family part, seven hundred and fifty thousand dollars. Well, I drew the line in the sand and said hey, if it goes below this price, I won’t go any lower. I lost the parts now. I have to make it up with other customers, other jobs, and so this is really affecting me more than ever before. I know that this same customer is shopping, and shopping in Mexico, and not necessarily Chin, in Mexico was where these parts went to, and I’m asking myself and I’m watching this closely, because are these companies in these foreign countries actually playing on the same playing field? Are they playing by the same rules? I’m not sure of that. I have a hunch and a feel that they’re actually having a little advantage because they don’t have all the restrictions. Certainly in manufacturing they don’t have restrictions. But possibly with my customer, they’re giving them a few breaks, they’re letting some things slide that I can’t slide. In other words, am I producing parts at a higher standard? Well, I’ve come to a conclusion. I’m not lowering my standard. I’m going to keep my quality. I’m going to keep every bit of my quality. I’m going to prove that I’m a quality company. And yet, I’ve got to be even more efficient than ever before, because I got to be able to make those parts faster. I’ve got to be able to produce those chart parts cheaper. I have to be able to buy raw materials cheaper than before. So, it’s kind of like this golf tournament which has 80 some kids in my six-year-old grandson’s bracket. He’s competing. Yesterday, he competed in his bracket of three with someone from Ecuador, and they’re competing in a global event. So, you have to look at this with a little bit of excitement, because I know I can win. I know I can do this. I know we can get better. But, it’s requiring us to get better than ever before. We’ve got to be more efficient than before. We’ve got to be better than we’ve before. We’ve got to be understanding our process is better. We’ve got to push out any inefficiencies that we have in our systems. We have to have better and higher production from our shops. I’m looking at my equipment saying hey, do I have the very fastest and best. I’m also realizing, I teach this all around, that when I was in my service business with the moving and storage business, I had other competitors in this service business. So, I made a point of knowing my competition. In those days, I had a map of my city and I actually put a dot for every location in the city. For every mini storage as a storage unit, and every moving company so I was aware of who my competition was. And, without being unethical, I paid someone in my company to shop around and call all of these moving companies, and make a truthful shopping experience to determine what their rates were, where they went, when, and how they charged the rates whether they included insurance. I needed to know what my competition was doing, and I found around the world that many times we’ve not done that. We don’t really know what our competition is like. We don’t go in and shop, and see, and understand who our competition is. In the the very famous company in the U.S. that almost everybody in the world knows, Walmart. Mr. Sam Walton, he went in personally and shopped his competitor, and he talked with the the shipping clerk, he talked with the checkout line, he looked at the stocking shelves. He was always shopping his competitors. So he had knowledge. Knowledge brings a power and strength, and in my case, I’m booking myself within the next five weeks to go to China. I’m going to visit as many manufacturing companies as I can in China to understand really what they can do. I’m not sure of that. I’m not sure how efficient they are. I’m not sure how they do processes. And I’m going to dig in as far as I can ethically and legally to shop my competitors. I think it’s important because this is a race. This is the fun part of it. This is why I’m in business. I like the competition, and just like watching my grandson today. He’s going to play nine holes of golf and he’s going to shoot near par, which grandpa can’t do that. He can actually give me teaching lessons because he’s a better golfer at age six than I am, but I’m going to learn how my competition works. I’m in a global market. I enjoy it. That’s why I am busy in business, and if you don’t enjoy competition, you’re missing the mark, because you know what? According to Sam Walton and his basic entrepreneurs creed that the competition is what causes us to be better. We cannot rest on what we did last year, the year before. We can’t rest on a computer system we had. We always must be improving because the competition is there. If you want no competition, then get out of business. That’s all you can do.