Manufacturing supply woes

More than one-half of U.S. manufacturers participating in a recent survey say they have suffered a supply-chain disruption in the past three months, according to MFGWatch Survey.

The new survey also suggests that manufacturers say they economic recovery is losing steam.

The latest MFGWatch survey targeted nearly 500 Supply-side manufacturers, as well as Buy-side OEMs (original equipment manufacturers) and sourcing professionals throughout North America. Respondents represent an array of industries, including automotive, aerospace, medical, industrial equipment, consumer products and textiles.

“The stated job losses within large manufacturers is troubling because we need to see more consistent employment growth,” Mitch Free, founder and CEO of MFG.com, said in a statement. It’s likely that many of these OEMs are sourcing more work to their supply chains, which explains the growth in small and mid-sized manufacturers. But the most perplexing data is around supply chain disruptions; this quarter, over half indicate they’ve experienced a significant disruption. This number represents a tremendous level of instability and waste.”

SURVEY RESULTS
• 20% of respondents indicated that they added to employment for the period, down from 27% in the first quarter of 2010 – an unexpected drop of 7%.

• 23% say they decreased staff, up from 10% in the first quarter of 2010 and above the 21% reported in the fourth quarter of 2009.

• Small and medium-sized manufacturers (SMMs) added to their employment roles in the latest quarter — 29% compared to 23% in the previous quarter. Only 18% say they’ve eliminated jobs at their shops and plants, down from 20% in the previous quarter.

• Expectations to increase the number of suppliers large manufacturers engage for production rose to 43% from 32% in the previous quarter. However, only 8% grew their stable of suppliers – the third straight quarter with such disparity.

• While nearly one-third (31%) of large manufacturers expected to increase employment in the second quarter of 2010, only 20% did so.

• A walloping 51% of large North American manufacturers say they’ve experienced a significant disruption, compared to 44% in the previous quarter.

• 21% of OEMs said they’ve returned some production to North America from low-cost countries in the second quarter of 2010, up from 12% in the previous quarter.

• Well over one-third (38%) said they will be researching bringing production into or closer to North America in the third quarter of 2010, up from 31% in the last quarter.

• For the fourth straight quarter, more than one-third of SMMs (42%) said they’ve received inquiries or work from companies suffering from supply chain disruptions.