Success Insight: A Chamber Member's Story

 

As global competition intensifies, many small and medium-size business owners are losing customers to countries like China and India, with their cheap labor and reduced costs. One such business owner, Darlene Miller, refused to allow her company-a manufacturer of everything from hydraulics to medical equipment to food service items-to become a casualty of global competition.

 

Miller, president and CEO of Permac Industries, realized in 2003 that competition from China could threaten her manufacturing operation when some of her customers began pressuring her to lower prices. Companies in China were offering them similar parts and products for 40% to 80% less.

 

For Permac to survive, Miller knew that she would have to attain as much knowledge as possible about China. So, in 2003, she visited that country with dozens of other business owners to tour facilities and network with their Chinese counterparts.

 

"Really, it was a mission to see what our competition was all about-how they made parts, what the labor situation was like, and what equipment they used," says Miller. "I wanted to see exactly what they were doing that made this giant price difference possible."

 

The plant tours revealed that Permac couldn't match low Chinese labor costs. Most workplaces had 10 employees for every one of hers, and safety guidelines were nonexistent. But Miller also learned that American technology was vastly superior.

 

Miller returned and incorporated new technology at Permac, which has led to a leaner and more efficient manufacturing process and better parts. She has been to China twice since her original trip and now has two formal business partnerships there.

 

Miller's knowledge of the China market enables her to educate potential customers about its parts and products. If a potential customer decides to do business with a Chinese manufacturer, she can expedite the transaction through her Chinese network. However, Miller finds that most businesses ultimately decide to purchase Permac parts because of their superior quality.

 

With competition from India brewing, Miller has begun planning an exploratory trip there. "The more you know about your competition, the easier it is to succeed," she maintains. These are truly  valuable words of advice for any American entrepreneur trying to compete in the global marketplace.

 

To share a Success InSight of your own, e-mail Greg Galdabini at ggaldabi@uschamber.com, phone 202-463-5563, or fax to 202-463-5507.