The U.S. Manufacturing Landscape

The U.S. Manufacturing Landscape

A summary of results from the 2005 IW/MPI Census of Manufacturers.

While many aspects of U.S.-based manufacturing have been debated in recent years -- usually with the goal of "fixing" manufacturing -- two attributes have not been widely addressed: We are old and stubborn.

Like elderly parents who long since should have abandoned the family home for a condo in Florida, manufacturers are refusing to leave older facilities for ones more suited to modern production. Despite advances in technology and operations that require far less space and far more integration, U.S. manufacturing is done largely in plants built at least two decades ago. Are manufacturers missing an opportunity to lower overhead -- and therefore costs -- and improve processes, by not updating or abandoning old facilities? Perhaps.

Additionally, the IW/MPI Census shows that almost half of U.S. manufacturers are in the industrial equipment, automotive or construction sectors. For all of the lip service politicians like to give to high-tech and biotech manufacturing taking over, most of manufacturing going on in the United States today is "old school."

Plant Profile






Revenue Of Parent Company

Less than $100 million 75%
$100 million -- $499 million 9.5%
$500 million -- $999 million 4.2%
$1 billion -- $5 billion 4.5%
$6 billion -- $10 billion 3.2%
More than $10 billion 3.5%

Industry

Industrial equipment and machinery 19.8%
Automotive 12.7%
Construction 11.9%
Consumer product durables 9.2%
Consumer packaged goods/nondurables 8.5%
Pharmaceuticals, biotechnology, medical 5.1%
Printing and publishing 4.8%
High-tech 4.7%
Aerospace 4.2%
Chemicals 3.7%
Defense industry 1.9%
None of the above 13.5%


Operations

Those that have jumped on the process improvement bus seem to be headed in the right direction. But those that haven't are like homeowners who don't heed mandatory evacuation warnings before a hurricane or tornado -- it's easier in the short term but could be deadly in the long.

The good news is that about fourth-fifths of the manufacturers surveyed for the 2005 IW/MPI Census recognize the value of process improvement, have embraced one or more methods and are spreading these methods to areas other than production at their plants. The bad news is that one-fifth of those surveyed have no primary improvement method and an even larger percentage report no progress toward world-class status, which puts them at an incredible disadvantage. Additionally, respondents are to be commended for making quality, continuous-improvement certifications and customer service top strategic practices, but they could be leaving money on the table by not looking closer at other practices: energy usage management and open-book management, for instance.






Where Method Is Applied (multiple responses possible)

Production 82.3%
Materials management 43.4%
Shipping and logistics 39.3%
Purchasing 32.1%
Customer relations 26.8%
Engineering 23.2%
Supplier relations 19.7%
Administration 19.4%
Finance and accounting 16.3%
Research and development 9.3%
Other 3.1%
None of these 11.1%

Strategic Practices (multiple responses possible)
Continuous-improvement program 66.5%
Quality certifications (e.g., IOS) 45.4%
Customer satisfaction surveys 45.1%
Benchmarking 34.6%
Environmental management 25.3%
Total production maintainance 21.7%
Energy management 16.1%
Open-book management 15.0%
None of these 13.6%

About the 2005 IW/MPI Census Of Manufacturers

Methodology: The IW/MPI Census of Manufacturers was conducted in late spring 2005. We asked more than 100 questions of manufacturers across the United States. There were 668 respondents (540 by mail and 128 online), and all responses were anonymous.

Results: IndustryWeek will report on the survey results in dedicated features and as part of related coverage. Dedicated features in future issues include:

  • Dec. 2005: Benefits, transportation and raw material costs.
  • Jan. 2006: IT investments and effectiveness.
  • April 2006: Managing customers and suppliers.

Online: Census results will be included in a twice-a-month Continuous Improvement newsletter. Click here to subscribe.

About MPI: The Manufacturing Performance Institute, is a Cleveland-based research organization specializing in research development, analysis and communications.

For a summary of the complete results or industry-specific data from the 2005 IW/MPI Census of Manufacturers, contact MPI at 800-603-2272 or online at www.mpi-group.net. For specific questions regarding the study or the IndustryWeek/MPI Benchmarking Toolkit, an interactive manufacturing improvement tool, e-mail [email protected]

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