Center for Business, Industry & Labor

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Partnering Helps Small Companies Survive Slow Economy

Regardless of their market sector, customer base, or size, many organizations have found the last two years challenging. They have faced changes in demand for their products and/or services as well as changes in their customer bases. Smaller companies, because of limited resources,  face specific challenges that require creativity in this changing economy.

While larger organizations tend to have deeper resource pockets, their very size may make them less flexible in adapting quickly to changing market trends. Smaller companies, on the other hand, may not have the extensive resources of their larger counterparts, yet they may be better equipped, due to their leaner structure, to adapt more quickly to changes in the economy. In other words, to remain viable, smaller organizations need to capitalize on their strengths while looking for ways to minimize any weaknesses. This means staying competitive by continuing to control their operating costs while staying abreast of technological innovations. They must also continue to build relationships with their customers, many of whom may be contractors themselves.

Nowhere are these differences more apparent than in customer-supplier relationships in the manufacturing sector where over 99% of all U.S. manufacturers employ fewer than 500 employees. It is these same organizations, however, who provide over 50% of all value added to U.S. manufacturing concerns.

Within the manufacturing sector’s defense industry partnerships between primary contractors and smaller enterprises have become increasingly important. Partnering helps all parties maximize employee efforts, streamline work processes, and focus their technological resources. The interdependence between primary contractors and their suppliers is so real that smaller businesses account for two-thirds of the primary contractor’s costs. This implies that primary contractors utilize smaller organizations as cost control measures as well as for their expertise. However, the small size of these operations can result in knowledge and technology shortfalls. Their lack of state of the art productivity practices due to limited resources may make it difficult for them to keep pace with demand when their primary contractor is in an economic pinch.

This presents a predicament for smaller organizations. How can they stay abreast of technological changes and hone their employees’ knowledge and skill bases? One way is to form a different kind of partnership with performance improvement organizations. CBIL has worked with small companies for over twenty years providing resources that help the smaller companies maintain a competitive edge. Smaller companies can profit from this kind of partnership by drawing upon the expertise of CBIL consultants, engineers, and technical writers who can standardize procedures and provide training on the latest technological innovations.

For the economic recovery to be significant, small companies need to continue to look for ways to improve their performance, anticipate their customer’s needs, and position themselves to respond proactively for the future. One way to do so is to form successful partnerships, looking for partners who can provide them with programs geared to their specific needs. The Center for Business, Industry and Labor is situated to satisfy these needs.