Evening star., 1942-07-06
$4,000 Small Firms
Face Tough Fight
10 Remain Open
May Have to Close
By October Unless
They Think Fost
BY JAMES MARROW and
WILLIAM PINKERTON.


the wall. They use their heads now,
or they go down.
Philip Reed, chief of the war in
dustries branch of the War Pro-
duction Board, has estimated $4,000
manufacturers might be forced to
close their doors by October /.
These firms, with an annual sales
volume ranging from $250,00O to
s2,500,000 according to business
management engineers fall into two
main groups:
Those who can neither get ma
terials for civilian operation nor con-
vert to war production; and those
who still can convert but have not
yet secured contracts.
Some of them may go down for
lack of imagination, selling ability,
and plain common sense in dealing
with people.
Perhaps one third of the $4,000
predicted victims of this country's
driving need to get the war job done
still can save themselves, in the
opinion of Marvin Bower, partner
in the management engineering
firm of McKinskey & Co.
Confidence Is Key.
Basing his conclusions on sur
vey of small companies that have
been successful or unsuccessful in
securing war contracts, Bower says:
THE key to securing direct prime
contracts from some branch of the
armed forces lies in an understand
ing of the psychology of the con-
tracing officers.
There has been much talk about
the larger corporations being fa-
vored over the small concerns, but
basically it gets back to the belief
of the contracting officer that the
larger concerns are better managed,
have better management techniques
and therefore will be more certain
to meet contract provisions.
"The smaller concern has greater
difficulty in establishing by reputa-
ton that it has sound management
techniques. Consequently it has a
selling job to do before it can get
a contract for a product OF a type
with which it does not have ex-
perience.
"The contracting officer is more
willing to accept the contract OF
the smaller concern when 1t is
manufacturing product similar
in character to that which it nor
mally produces"
For the businessman who Stub
bornly refused to switch from his
old-time products" the Research
Institute of America says, "this may
we'll prove to be the last call.
IF he doesn't use now the few
remaining opportunities to convert
he may have to write the END 10
his business history
But what of the small corporation
which does not know what type OF
product it might manufacture SIM
liar to its normal production?
This is the type of company which
is first on the timetable of failures
unless it takes prompt and aggres-
sive action, according to Bower, who
recommends the following program
for small concerns:
TRY to sell the Government with
the same imagination and vigor re-
quired IN selling in any competitive
market. A definite sales staff should
be set UP tc contact local as well
as Washington branches OF the varl-
GUS armed services. Don't get the
idea the Government can undertake
to search you out. The Govern
ments problem is too gigantic.
Concerns without prime contracts
should put their greatest emphasis
on securing subcontracts.
Shbcontracting Pushed.
THE Army, Navy and Air Corps
in recent months have brought great
pressure to bear on the large prime
contractors to do subcontracting be-
cause the drastic shortages of ma
terials have forced the War Produc-
ton Board to limit the construction
of new plants.
Thus, the services are putting
pressure or the large contractors
to substitute subcontracts for addi-
tional prime contracts requiring new
facilities Most of them have set up
organiza+ional units for this type of
work.
Our survey among the small
manufacturers shows that In recent
weeks such pressure has largely
stimulated the number of inquiries
they a.e receiving from the prime
contractors This is the most i'm
portano tangible action that has
come out of Washington to help
the small manufacturers, many OF
whom have failed to realize this
fundamental change has taken
place.
I'm seeking prime contracts, the
small manufacturer has a triple SELL
ing job:
"First-he must make certain he
has the facilities, management
methods and personnel that will
enable him to manufacture a type
of product new to him. His ma
chinery need not be extensive or
new, but it should be in good
repair and the plant should be
properly laid out. Production plan
ming and scheduling methods should
be up-tO-date.
"Supervision in the plant should
be effective. This is the first need
of the small manufacturer because,
If he is to be successful in getting
a contract, he will be subject to in
spection by Government repre-
sentative familiar with good man
agement
"Second-the small manufactur-
ers seeking prime contracts must
find his market. using his imagina-
ton to determine what type of
product he can produce which
some branch of the armed services
wants.
This requires extensive contact