Loading ...How to survive the Manufacturing game….1. Move up to the next higher level in the quality end of the product.2.Increase production at that level is possible because they previously had room because profit being higher and had not yet squeezed out the highest production.3. Deliver product to the customer faster which is certainly possible because transportation is where your advantage is. In clothing manufacturing it took 3 -9 months to go from cutting to shipping ,I cut the time to 3 DAYS .Thats incredibly important where styles change.Thats what put Sears out of the clothing business.They found it impossible to change styles on the fly..They got bogged down with every other manufacturer except me that couldent ship on time with any style change at all.They always called on me for “emergency” deliveries .WE moved up from Sears to department store customers where margins were better,we could deliver style changes faster ….What almost killed us was the recession in 1969 when Department stores stopped paying on time and some went from 30 days to 90 day before they paid and if your doing 1 million $ a month your cash flow dried up by 3 million on a 90day delay..So it wasent the manufacturing competition that hurt ,it was the CASH FLOW …In that business you manufacture for 6months and ship only in the last three months of the year .Stores dont want to inventory and only allow shipping as close to Christmas sales as possible.Its the RETAILERS THAT KILL their suppliers.
Then manufacturers “FACTOR”their accounts receivables (borrrow against it )until payment is made….more expense ! Manufacturing got squeezed from all sides.
The margins were small typically 3 % to start with ….and then even if you made that you couldent collect payment. Bring manufacturing back ? I dont think so unless everything changes ! Trump survived the Real Estate building business by going up scale just like we did .Real Estate on the LOW end only worked after WW2 when the volume was high.
PS.We survived the cash flow problem by starting a Factory outlet for CASH SALES …..thats what got rid of ALL THE PARASITIC practices of the Unions,the Retailers ,the money lenders,the Gobberment all in one fell swoop…!