Your vicinity hides more industrial power than you might think of!
In Europe, at least, it is well known that Southwestern German companies are very keen on partnering with companies that are in the same small town or village. It is also well known that Southwestern Germany is an industrial powerhouse; full of successful manufacturing SMEs.
Why are they so successful?
According to a study made by the Association of German Management Consultants (BDU) and a University in Southwest of Germany the two major factors for successful co-operation are:
- similar values
- common language
Because entrepreneurs associate good co-operation with these factors, it is only natural that their first choice for a co-operation partner is a local company.
Talking to these entrepreneurs, one of the most impressive things to me is their attitude towards close by companies and far away suppliers. They trust and respect their local partners. Even considering having partner from Eastern part of Germany is for many of them a mental hurdle.
Sheet metal is bent and drilled in a local workshop and delivered only 1.5 miles away to the customer. Local small EMS companies have very close relationship that facilitates a very flexible supply chain.
Frequently these small and medium size manufacturers tackle problems together. It is not that they believe from the onset that they have the most capable suppliers around. They do know that suppliers behind long distances certainly could potentially supply almost off the shelf their required products or sub-assemblies, still they want to have their suppliers close to them. They together take on the challenge and make required products even better, developing at the same time their common skills and enhancing their competitive edge.
The advantages are:
- Having better control over your supply chain
- Efficient and nimble operations
- Responsive to end customer needs
- Total Cost will most likely be smaller than buying from far away. At least up to a certain volume
- Trust – Handshake means everything
- Administration is on a very low level
- Developed process competencies are hard to copy
In 2012 in Southwest Germany the GDP growth was almost 80% higher, than for the whole the Germany.
In times of omnipresent crisis, the SMEs in Southwestern part of Germany stick together and make each other and their local economy stronger.
In German SMEs are called “Mittelstand” and now the French want to adopt the model ;“le Mittelstand”!
During my business traveling and SME consulting work and also having been an industrial entrepreneur in Northern Europe, I have not seen anywhere this kind strong co-operation and local patriotism.
Look around your area and start working intensively with companies around you. Your company will develop unique competitive advantages that make you stronger and are hard to copy.