However, and for the first time in ages, there is today another path available to many metalcasters—grabbing a share of legitimate new market growth. The most promi- nent new market, one where casting demand does exceed supply, is wind energy. And more new growth is coming, so much so that some
are predicting a North American manufacturing renais- sance driven by a “green revolution.” While much of that remains to be seen, recognizing the opportunities inherent in wind power, solar power, rebuilding the electric power grid, retrofitting commercial and industrial building HVAC systems, modernizing municipal water systems and so on is an important new lesson to be learned about growing sales.
Lesson 7: Regulatory Compliance Is an Opportunity in Disguise Evolving state and fed-
eral environmental regu- lations remain a threat to our industry’s future. This threat involves increasingly stringent air permits, storm water pollution preven- tion, landfill management, indoor air quality require- ments and worker safety rules. But it’s also true that in our increasingly green world, few issues provide a greater opportunity for improvement, competitive advantage, sales growth and distinctive profitability. First and foremost, we learned early on that the CEO
needed to be fully engaged in regulatory matters to ensure risks were being appropriately mitigated. That involvement in turn helped us discover opportunities (including improving our position with existing customers, enticing them to transfer work from competitors, putting us at the top of preferred supplier lists, etc.) and provided a vehicle for ensuring they were being acted upon. Second, as a means of keeping the company ahead of the
regulators, we learned to appreciate programs like the ISO 14001 Environmental Management System framework which, if used properly, can be an important learning experience. In fact, with the right top management involvement and leadership, such a learning experience can in turn become a powerful springboard for improvement and an excellent way to get the regulators’ attention—in a good way. However, without that leadership, such a system can easily devolve into an all but worthless manual writing exercise. Third, we learned that environmental responsibility is im-
portant to our industry’s sophisticated and increasingly green customer base, and that a genuine commitment to exceed- ing today’s compliance standards can create a competitive advantage and an avenue for distinctive profitability. Fourth, we learned that substantial investments are required to excel in the regulatory arena, but like investments in quality, many ultimately provide benefits that exceed their cost. For example, on the staffing side, we put a full-time compliance coordinator on the payroll and invested in her training and development. Also, we employed the services of a group of outside legal and technical experts. On the facilities side, significant investments were made in a variety of cost-saving improvement projects, as well as for controls
MODERN CASTING / March 2010 45
and equipment ranging from carbon monoxide monitoring devices to ductwork, baghouses and more. While many investments were necessary to keep the regu-
lators happy, tending to these matters also had far-reaching indirect benefits too. All customers applauded our efforts, and some moved business our way because of them. Important internal benefits also accrued. For example, the significant facility cleanup effort that went along with improving indoor air quality dovetailed with our Lean-inspired 5-S program and helped catalyze a chain of events that led to improved product quality, fewer accidents and injuries, lower workers compensation costs, lower quality costs, lower turnover and training costs, and improved customer satisfaction. Moreover, improving the facility environment inside and out boosted worker morale, enabled the company to attract and retain a higher caliber workforce and enhanced management’s relationship with labor. The lessons learned during the past four years highlight the
primacy of improvement to business success and underscore the need for CEOs to improve. Depending on economic and competitive circumstances, the CEO’s job is sometimes about structural change and profitability and at other times about be- havioral change and sustained improvement. Understanding that reality and learning from the seven lessons can help metalcasters and their CEOs to thrive in the challenging years ahead. MC
About the Author
Dan Marcus is the owner and principal consultant in the firm TDC Consulting Inc., Amherst, Wis., which specializes in management consulting, turnaround management and executive development for the metalcasting industry.
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