Episode Details

Connect with Rahul Sarkar:

Email: rsarkar@chiketa-phoenix.com

LinkedIn: https://www.linkedin.com/in/sarkarrahul/

Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers Network podcast. I'm excited today to introduce you to Rahul Sakar. Rahul is president of Clarity Manufacturing Consulting and has 30 years of manufacturing experience reinforced by postgraduate education from the Illinois Institute of Technology and the University of Notre Dame.

He has worked with a passion in the trenches, in the nooks and crannies worldwide to help small and medium fabrication and manufacturing companies win more bids, increase revenue and achieve operational improvements leading to greater profitability. Welcome to the show, Rahul. 

Rahul Sarkar: Thank you, Lisa. Thank you for having me. It's an honor to be here, and I'm looking forward to this.

Lisa Ryan: Great. Please, tell us a little bit about your background and journey. What led you into manufacturing and doing what you do?

Rahul Sarkar: Well, I initially had wanted to become a teacher, a professor at a university, but I soon very quickly got into manufacturing. And I think the reason I have focused for the past 30 years and worked in small and medium manufacturing companies is that many years ago, my first boss, who became a business partner, later on, told me that if you work in a small, medium manufacturing company, you will learn a lot. You'll wear multiple hats, and boy, he was right.

And so I have been, like you mentioned, all over the world, various companies, visiting and understanding what manufacturing is all about. And, you know, the other thing that has driven me is that the small-medium manufacturing companies are in so many ways disadvantaged. If you think of the two hundred fifty-thousand manufacturing companies in the US, 80 percent, 75 to 80 percent of that number have 20 employees or less. I mean, think of that, 75 to 80 percent have 20 or fewer employees. They're the backbone of the manufacturing in this country, which is about 10 percent of GDP. Right.

But think of what the parts that have had to experience for the last 50 years, 50 years. And it is not getting any better. Profits have shrunk, their sales have shrunk. And that inequity is really troubling. I've made it my passion to understand what and why this happens to what can be done about it. And I hope to play a part in that.

Lisa Ryan: Profit is certainly important for any business. And when you're looking at these small and medium manufacturers (SMMs) compared to OEMs and some of the big players out there, that's a big thing. So what are some of the ways that SMMs can increase their profits in those times?

Rahul Sarkar: The answer to that is don't focus on profits. I'll explain what I mean by that. I think that mindset that focusing on the profits mindset has contributed to the sufferings and troubles of SMMs. Here's the thing. If you think of the large OEMs' profit margins, double-digit profit margins, easily 10, 15, 20 to 20 percent for if you're an Apple, you're 35, 40 percent.

And the small guys are shrinking from double digits to single digits. And heck, if you are making five percent net, you're celebrating at the end of the day. So that squeeze has been brought about by the large OEMs and enforcing the smaller manufacturers. It's almost like you don't know what will happen because the OEMs make products know what they're where the revenues come from.

They know democracy. They have a history and can make forward-looking projections. But for example, you are waiting for the scraps to fall off the table that the big dogs are dining at. It's the large OEMs that are squeezing the smaller guys for profit.

And guess what happens if you think of the exodus of US manufacturing in the late nineties