More than 2,500 manufacturing firms across the nation participated in the Next Generation Manufacturing Study, which identifies critical threats to the ability of U.S. manufacturers to compete and win in a fast-changing 21st century global economy.
Among the key findings:
- A serious gap exists between the strategies U.S. manufacturers believe are critical to their future success and their actual progress in implementing those strategies. More than 25% of American manufacturers -- representing more than 90,000 firms -- are at risk because they are not at or near world-class performance levels in any of the next generation strategies.
- Small-and-midsize manufacturers are less likely than larger firms to be at or near world-class status in each of the next generation strategies. One third of respondents with less than $10 million in annual revenue are not at or near world-class in any strategy, in contrast to 14% of respondents with more than $100 million in revenue. In a country where 282,000 small and midsize firms comprise the backbone of the industry, this is a significant threat to U.S. competitiveness and the viability of these companies.
- Green/Sustainability ranks low among the strategic priorities of U.S. manufacturers despite increasing government regulation, growing consumer demand and new requirements from large manufacturers in their supply chains. Only 16% of respondents rank green/sustainability as highly important to their success over the next five years. Another 16% said it was not important.
- Only 28% of respondents believe global engagement is highly important despite a near-term future in which markets, talent, competitors and partner opportunities are growing faster outside the U.S. than within its borders.
- Leadership loss represents a significant threat -- or opportunity. One quarter of respondents say a planned leadership succession will occur within the next five years -- potentially impacting 80,000 U.S. manufacturing firms. Another 29% think a succession may occur. This transition represents an opportunity to inject new ideas, energy and skill sets into these firms but also represents a significant risk where a succession plan is not place.
- Measurement systems are inadequately deployed. Even in one of the most fundamental and easiest-to-measure areas -- process improvement -- 46% of the respondents had no or only ad hoc measurement systems.
- Effective partnerships with employees, suppliers and regional support organizations are the exception rather than the norm. For example, the majority of respondents engage less than half of their employees in improvement initiatives, falling short of industry best practices that require company-wide participation.
"The results are a wakeup call," said Michael Klonsinski, ASMC board chair and executive director of the Wisconsin MEP. "The consequences of inaction could trigger even more job losses in manufacturing and ultimately a lower standard of living for all Americans."
The study, released on June 11, by the American Small Manufacturers Coalition (ASMC) and member Manufacturing Extension Partnership (MEP) centers, refers to Next Generation Manufacturing which is a framework of six strategies essential for global competitiveness today and in the future. The strategies are customer-focused innovation, systemic continuous improvement, advanced talent management, global engagement, extended enterprise management and sustainable products and processes.
"Manufacturers that focus on achieving world-class status in Next Generation Manufacturing strategies are leaving their competitors behind," said John Brandt, CEO of the Ohio-based Manufacturing Performance Institute (MPI), a global research firm that conducted the study. "They manage differently, implement best practices at far higher rates and outperform their non-world-class peers on a wide array of operational and financial metrics."
To download more information on the study and findings, visit www.smallmanufacturers.org
