Manufacturing survey highlights sector issues

Editor’s note: Roby Brock, with our content partner Talk Business, wrote this report. He can be reached at [email protected]

A new national survey released by a manufacturing coalition offers insight into U.S. and Arkansas companies.

The 2011 Next Generation Manufacturing (NGM) survey interviewed 824 American manufacturing companies on topics related to best practices, future investments and strategic initiatives. The final document, which you can read here, highlights a number of important shifts among manufacturers during the past 2 years:
• Nearly six out of 10 U.S. manufacturers (59%) could have a new leader in the next five years — a 5% increase over 2009.

• Sustainability is increasingly important to manufacturers, with 59% reporting that sustainability is important or highly important to their future, up from 35% in 2009.

• Only 18% of manufacturers have self-described "state-of-the-art" equipment.

• More than 83% of manufacturers were profitable in their most recent fiscal year.

When asked what percentage of sales would be invested into new product development or research and development, 31.5% said less than 1%. More than 46% said 1-5%, while 14% said 6-10% and 8% said more than 10%. Most of the shift in responses to this question from two years ago were from manufacturers who are reducing their R&D investment from "more than 10%" to  "less than 1%."

The NGM Study is focused on helping manufacturers adopt 6 core strategies to improve profitability and future performance, including:
• Customer-focused innovation: Develop, make, and market new products and services that meet customers’ needs at a pace faster than the competition.
• Engaged people/human capital acquisition, development and retention: Secure a competitive performance advantage by having superior systems in place to recruit, hire, develop, and retain talent.
• Superior processes/improvement focus: Record annual productivity and quality gains that exceed the competition through a companywide commitment to continuous improvement.
• Supply-chain management and collaboration: Develop and manage supply chains and partnerships that provide flexibility, response time, and delivery performance that exceeds the competition.
• Sustainability: Design and implement waste and energy-use reductions at a level that provides superior cost performance and recognizable customer value.
• Global engagement: Secure business advantages by having people, partnerships, and systems in place capable of engaging global markets and talents better than the competition.

“Helping small manufacturers identify strategic development priorities and overcome challenges within their operations will be key to the industry’s future growth and contribution to the nation’s economy,” said Dan Curtis, director of Arkansas Manufacturing Solutions, a state-supported program that works with manufacturers of all sizes to improve processes and profitability.

AMS is a supporter of the NGM survey and its goals.

“The six strategic areas assessed in the Next Generation Manufacturing Study serve as a road map for success to help U.S. manufacturers thrive in the next generation,” Curtis said.

The NGM survey was prepared by the Manufacturing Performance Institute in conjunction with the American Small Manufacturers Coalition and Next Generation Manufacturing.

Link here for the executive summary of the NGM 2011.