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Wednesday, December 16, 2015
Why Diversification is so Important to Manufacturing Pursuits
Over the past 30 years that I have been with Handling Specialty, the company has certainly weathered several economic “storms.” It was about 2002 when the third recession began to appear. It was once again most notable via the decline in the auto industry. We had just powered ourselves through the 90s when the auto industry was in full flight….and yes, we kind of put all our “eggs in one basket.”
Handling Specialty was a key player in assisting the US auto industry to tool up their assembly lines with skillet lifts, marriage stations, custom scissor lifts, CSA lifts and blank feed carts for stamping lines and our engineering and manufacturing departments were “humming.”
Our work in the auto industry forced the company to grow as an entity, giving birth to a full time service center for 24/7 response time. The bad thing was that we were all tooled up to continue reaping the rewards of our efforts when our single “basket” fell.
That’s it, we all thought….we’ve had enough!! We can no longer count on one or two industries to fuel our growth so we embarked on a diversification plan that launched us to new heights. In the 90s the auto industry represented about 90% of our business and today it represents about 15%. The auto industry revenue is down a bit, but the real influence that changed these figures was because our diversification plan worked. We knew that we needed to have some industries UP when others were DOWN. We had to have a balanced attack that produced a steady throughput. The throttling of resources up and down to suit demand was wearing thin on us and we wanted to gain a level of confidence that a steady throughput is accomplishable, even though we are in the engineered-to-order business. Thank Goodness we were successful with this strategy.
Today we are in business with the Automotive, Light and Heavy Rail, Aerospace, Entertainment, Defence, Energy, Marine and Nuclear industries. This being said, we continue to look at other industries to keep our diversification plan alive and well. Beyond the benefit of using diversification to keep the order books alive, I have seen diversification work for employee retention. Handling Specialty is full of bright, interested and creative minds. The market diversification and the varied solutions that accompany them, feeds these minds and keep them passionate about the success of the company. These stimulated minds are the reason we are doing well……so why not keep feeding them the full course meal….we’d lose our edge if we simply had that single basket full of eggs!