The U.S. Manufacturing Landscape

Data show manufacturers where they are and, more importantly, give direction for the future.

You are here. More than helpful, the information this phrase imparts is as necessary as any to mapping a route to your final destination. It may sound trite, or obvious, but it's true nonetheless. To get where you're going, you have to know where you are. The road to self-improvement is no different. The Second Annual IndustryWeek Census of Manufacturers, with research conducted in association with PricewaterhouseCoopers LLP, helps to provide that starting point by laying out the U.S. manufacturing landscape. Nearly 2,500 plant-level and corporate-level manufacturing executives have provided data on the practices underway in their plants and across their companies, as well as the performance metrics being achieved. These data allow IW to report with a high degree of accuracy the customer and supplier strategies, the broad strategic initiatives, the levels of employee empowerment, and the technologies being implemented across the entire universe of U.S. manufacturers. It demonstrates the first-pass quality yields, the manufacturing cycle times, and the on-time delivery rates being achieved by that same universe of manufacturers, as well as by manufacturers producing similar products. In essence, the IW Census is the map. The degree to which a company or plant has implemented best practices and the performance metrics it is achieving indicate its position on that map. However, as the features that comprise this report on the Second Annual IW Census show, data do more than define the U.S. manufacturing landscape. Thoughtful interpretation extracts the kind of information that can provide a competitive advantage. The IW Census "opens a window on the practices of world-class manufacturers; it sheds light on the leading trends in industry; it establishes reliable performance benchmarks; it provides honest viewpoints from corporate executives as well as from plant managers," says PricewaterhouseCoopers partner Barrett L. Boehm. ". . . This kind of peer-group analysis can uncover hidden opportunities to leapfrog the competition." Data collected in the Second Annual IndustryWeek Census of Manufacturers have been examined by a number of industry experts. They also have been compared with data compiled in the inaugural IW Census, which asked a similar pool of respondents to provide many of the same metrics and implementation levels of best practices. With two years' worth of data on the characteristics, best practices, and performance metrics of U.S. manufacturing, the IW Census can indicate the emergence of certain themes:

  • There is a disparity between what manufacturers preach as important initiatives to achieving world-class status and the degree to which they practice those initiatives in their plants and throughout their companies. Data show that, by and large, manufacturers agree on the strategies they say are critical to attaining world-class manufacturing status. However, their ability to implement those strategies appears less successful than their ability to identify them. As a secondary disconnect, plant-level and corporate-level manufacturing executives show markedly different opinions as to the degree of implementation of manufacturing practices, broad initiatives, and technologies underway in their plants and throughout their companies. Without fail, corporate executives deliver the more optimistic data (see "Levels of Dispute").
  • World-class manufacturers are made, not born. Manufacturing plants that are achieving the best metrics are the manufacturing plants that are implementing the best practices, be they customer service, supplier strategies, human resources, or manufacturing and quality initiatives. They also are implementing new process and information technologies more extensively than their less-productive counterparts (see "World-Class Manufacturers").
  • Manufacturers are placing an emphasis on technology issues related to connectivity. Implementation levels of Internet connections, intranet connections, and EDI links to customers are high and should continue to increase (see "'Net Gains").
This report on the Second Annual IndustryWeek Census of Manufacturers will explore each of these emerging trends individually, outlining data that provide supporting evidence and discussing the possible ramifications to the manufacturing community. The report opens, however, with a big-picture look at U.S. manufacturing, focusing largely on the practices and performances reported by respondents to the plant-level survey. This overview should help manufacturers mark their own progress on the road to world-class manufacturing.
Survey Methodology
The Second Annual IndustryWeek Census of Manufacturers was designed to collect information about U.S. manufacturing trends, best practices, and specific manufacturing performance metrics. To that end, two questionnaires were developed: a mail survey targeting plant-level manufacturing executives and a telephone survey targeting corporate-level manufacturing executives. Questionnaire Development Questionnaire development was a joint effort between IW and PricewaterhouseCoopers. The final mail survey consisted of more than 100 questions, and the final telephone survey consisted of an average 12-minute interview covering almost 90 questions. Sample Design IW provided a list of approximately 28,000 recipients for the mail survey. The targeted plants had SIC codes of 20-39 or 73, and an employee population of at least 100 workers. The recipients held titles such as plant manager and manufacturing manager. For the corporate survey, IW supplied a list of approximately 800 corporate-level managers, with titles such as director of manufacturing and vice president of manufacturing, whose companies employed at least 250 workers. Survey Administration Each plant leader was sent a packet containing a letter describing the survey, a questionnaire, a business reply envelope, and a separate survey-participation card to ensure the anonymity of survey responses. The packets were mailed in mid-April and completed surveys were accepted through early June. Telephone interviews were conducted during April and May. Calls were made by the interviewing staff, and interviews were monitored by PricewaterhouseCoopers Survey Research Center supervisors. Survey-Administration Statistics Some 316 phone interviews were completed, which correlates to a response rate of approximately 40% for the phone survey. A total of 2,116 completed mail surveys were received, which correlates to a response rate of approximately 8% for the mail survey. About PricewaterhouseCoopers PricewaterhouseCoopers, the world's largest professional-services organization, helps its clients build value, manage risk, and improve their performance. Drawing on the talents of more than 140,000 people in 152 countries, PricewaterhouseCoopers provides a full range of business advisory services to leading global, national, and local companies and to public institutions. These services include audit, accounting, and tax advice; management, information technology, and human-resource consulting; financial advisory services including mergers and acquisitions, business recovery, project finance, and litigation support; business-process outsourcing services; and legal services through a global network of affiliated law firms. PricewaterhouseCoopers refers to the U.S. firm of PricewaterhouseCoopers LLP and other members of the worldwide PricewaterhouseCoopers organization. Deeper Census Data Available: A comprehensive, in-depth analysis of the plant- and corporate-survey results can be found in IndustryWeek's Benchmarking Tool Kit. The Tool Kit contains a 250-plus-page Census of Manufacturers Research Report; an Interactive Benchmarking Database that allows users to analyze data submitted by nearly 5,000 manufacturing plants; a searchable best-practices library that contains over 2,000 personally validated best practices collected from over 100 leading manufacturers; an America's Best-Plants statistical abstract; and much more. For more information, contact IW's customer service department at 800-326-4146.
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