On the campaign trail, we hear Donald Trump telling Americans that we have to stop sending our jobs to China. But if you run a company and suddenly Chinese products have dramatically undercut your pricing, that is a game changer, and you’d be tempted to manufacture in China.
Richard Bemis, chairman of the board for Sheboygan Falls-based Bemis Manufacturing Co., faced this when one of his largest retail customers decided to switch
all its toilet seats to a Chinese supplier.
Richard had made trips to China several years earlier to try and understand the competition. He discovered that the Chinese “all in” cost of an employee was less than $1.25 per hour. No time-and-a-half or double time; no health or retirement benefits. They had very few environmental regulations, allowing solvent-based lacquer to be vented into the atmosphere. Conditions were less than safe for the workers, subjecting them to molding resin being made in a garage-like environment.
It became apparent that trying to beat the Chinese on pricing was going to be difficult. But studying the enemy is exactly what generals will tell you is the first step to winning a war.
The strategy, developed by the Bemis sales and marketing team, was to win the war by offering features and benefits that could be protected and that appealed to the toilet seat buyers.
When a random panel of homeowners was asked about their least favorite cleaning tasks in the home, cleaning the toilet was right up there. So, Bemis came up with a seat that can be easily removed from the toilet bowl to make cleaning easier.
Another common complaint was that the toilet seat became loose over time. The STA-TITE Fastening System was introduced to ensure that the seat never loosens. A Whisper·Close hinge was also developed to prevent seats from slamming down. All of these features were patent protected, separating Bemis seats from the non-innovative Chinese look-alikes.
Finally, Bemis significantly increased automation to its assembly lines with new robotic technology. Bemis can now Bemis Manufacturing Co. increased automation on its toilet seat assembly lines with new robotic technology. Bemis can now match the Chinese dollar for dollar on their labor costs.
American business leaders could learn from all of this. Bemis is one of the few remaining American manufacturers that makes toilet seats with American workers. To keep jobs and innovation in America, Bemis followed many steps to win the design revolution.
Here are some lessons:
- Build a design capability into your manufacturing operation. Bring designers into the process early to work with engineers to evolve products.
Designers are trained to study consumer behavior, thus improving the customer experience in using those products.
- Talk to your customers. Video record them, listen to them and see what new insights you can develop that will give you a competitive advantage. One of the best ideas is to create a “customer journey map” to fully understand the use of your products from their standpoint.
- Use prototypes to explore possible solutions to reduce the cost of innovation. The MIT Media Lab calls this: “Demo or Die.” It recognizes that active prototyping can transform an idea into something truly while keeping costs down. Testing through 3D printing is a dream for prototyping.
- Tolerate failure. A design-driven culture recognizes that it’s rare to get something right the first time. GE requires teams to try new iterations and then keep pivoting from what they learn.
This is what successful entrepreneurs do when they start companies.
So, here’s your homework assignment: The next time you use a private or public bathroom, study the various toilet seat designs and celebrate the fact that the Chinese could not compete with Bemis’ innovative design.
And by the way, that large retail customer that switched to Chinese toilet seats is back to selling Bemis toilet seats