Homeschool day 27 of 180

I am a part owner in a small wood parts manufacturing business in Idaho called Quality Corners. Mostly, we manufacture small wood millwork parts such as rosettes, plinth blocks, and round base corners for houses. It is definitely a low-tech manufacturing operation. Our biggest competition is from China. Initially, we were only able to compete by offering to ship small quantities of our products on short notice–something that is very difficult to do from China. Our price was higher, but for rush orders, it made sense to buy from us. Then, by improving our automation, we were able to offer a price that attracted a large customer very close to us in Idaho. It made sense for a couple of reasons. Our customer’s trucks drove by our factory several times per day so we did not have to charge for shipping. In addition, the order sizes increased sufficiently that our costs were reduced due to economy of scale efficiency improvements.

Now, it is about a year later and we are working on ways to attract other customers. We have spoken with several other of our customers and found that we do not have to go much lower to be able to win their business. We have a reputation for great quality and on time delivery. All of the individual steps in the part machining process are automated, but we mostly finish the and package the parts by hand. Currently, we are building an automated finish line and semi-automated packaging line. When those machines are finished we plan to tie all of the individual elements of the process into a continuous flow manufacturing line that will drive the cost low enough that China will have little or no labor advantage. We hope this will allow us to win more market share and grow our business.

Our customers have identified several items they say they would love to buy from us for the right price, but that they are currently buying in China. Our plan is to consolidate our position with our current product lines before we try take on these new items. The new items will require larger capital outlays than we have taken on in the past, but with the experience we have at controlling our growth to this point will serve us well with these new and bigger opportunities.