Industryweek 12322 Middle Market
Industryweek 12322 Middle Market
Industryweek 12322 Middle Market
Industryweek 12322 Middle Market
Industryweek 12322 Middle Market

Challenges, Opportunities and Tools for Middle Market Businesses

Nov. 2, 2016
Understanding the current conditions for today’s mid-sized businesses.

We reached out to Doug Farren, Managing Director at the National Center for the Middle Market (NCMM) and Jorge Izquierdo, VP of Market Development at PMMI, The Association for Packaging and Processing Technologies, to better understand current conditions for today’s mid-sized businesses.

What challenges do middle market companies face?

Doug: Middle market companies face unique challenges relative to large and small businesses. Too big for exemptions yet too small to have the resources to address many common headwinds, middle market companies are often forced to bear significant burdens dealing with government regulations, the ability to attract and retain talent, and enter global markets. The scale of large companies affords the ability to address these concerns, not necessarily with ease but with more resources.

Regulations are a significant burden on middle market companies since their size and unique needs are rarely considered by elected officials and government organizations that develop and manage such oversight. Additionally, access to capital has been called out as a concern in some industries, where traditional bank loans and other lines of credit may not be sufficient to supplement working capital. Ironically, we find middle market companies are remarkably efficient in their operations – many of their leaders are sharply focused on day-to-day operations.

Jorge: The middle market can face a variety of challenges when it comes to purchasing equipment, training staff and adhering to regulations. When making equipment procurements, executives must properly execute Factory Acceptance Tests (FAT) and must accurately calculate Total Cost of Ownership (TCO); otherwise, they may not see a ROI. In regard to recruiting, training and retaining staff, larger companies often have an advantage with a more developed HR department and general presence in the industry, offering competitive opportunities that middle market companies might have difficulty matching. Additionally, compliance with regulations – such as with the relatively new Food Safety Modernization Act (FSMA) – can be difficult due to their complexity. As opposed to larger companies that might have resources dedicated to each of these responsibilities, middle market executives must often wear many hats.

What opportunities are unique to middle market companies? What advantages do they have?

Doug: Middle market companies are well-positioned to react to opportunities in their industry or marketplace, with more impact than a start-up or small business (perhaps due to the age of the firm, capacity, market presence, or other) and with more nimbleness than large businesses that are typically publicly-held corporations.

Jorge: Mid-sized companies can capitalize on their size, mobility and customer relations. They can be on the pulse of client demands, anticipating market opportunities and green-lighting operational shifts faster than larger companies, which may require a lot of deliberation prior to making changes. For example, they can shift to producing a very specific, high-profit segment that would be too small to engage a larger company’s focus; therefore, capturing an emerging market during its upswing. They also have more resources and manpower than small businesses to make these shifts quickly.

What tools can middle market companies take advantage of as they grow? How can middle market companies accelerate their growth?

Doug: Middle market companies consistently exhibit a need to become more strategic in their planning and thinking, and being aggressive in implementing tools such as data analytics and social media presence in a way scaled for their own size. The NCMM also has identified globalization, through exporting or foreign direct investment, as an under-utilized growth strategy when appropriate for a firm’s products and services.

Jorge: Robotics and automation technologies have become increasingly affordable1, which can help middle market companies increase flexibility and speed of operations. The transition to advanced manufacturing technology can also serve to automate the documentation process, which is advantageous for regulatory compliance2. In order to maximize return on their technology investments, middle market companies can look to measurement and performance tools such as Overall Equipment Effectiveness (OEE). OEE is a method for quantifying the performance of production line equipment. By utilizing OEE, mid-size companies can help ensure profitability.

What do middle market companies need to be aware of as they grow?

Doug: Smart growth is essential, and companies need a plan that anticipates not only current challenges but also future needs. The NCMM has not seen many examples of sophisticated corporate planning and strategy development, which can focus activities and keep employees informed of future direction. The fastest growing firms in the middle market appear to do this very well.

Jorge: One aspect of smart growth that middle market companies must consider is workforce engagement. “Actively disengaged” employees cost U.S. companies an estimated $450 to $550 billion annually in lost productivity3. Mid-sized companies can benefit from placing emphasis on creating meaningful work for employees, which results in less turnover and a committed workforce. When leadership effectively fosters a culture of engagement at their organization, individuals operate at higher levels of creativity, independent thinking and problem solving. To keep employees engaged, middle market companies can look toward the foundation of workforce engagement – empowerment, enablement and connection4.

How can middle sized companies benefit from your offerings specifically?

Doug: The NCMM is the first center of its kind to provide research and thought-leadership, along with highly supportive networks and communities, to help middle market companies grow. The research platform focuses on five key areas – Talent, Operations, Finance and Governance, Growth and Innovation, and Economic Policy. In addition, the NCMM partners with organizations around the US to provide content, participate in conferences and events, and share the latest performance data and managerial insights. Finally, the NCMM has started developing resource centers for middle market companies to use directly to addresses challenges and assist in their own growth path.

Jorge: Middle market companies can benefit from business intelligence, operational excellence, and workforce education resources provided by PMMI as well as the community it fosters through PACK EXPO International and the OpX Leadership Network. The OpX Leadership Network is a dynamic community of manufacturing, engineering and operations professionals dedicated to operational excellence. By liaising with industry professionals, mid-sized companies can join the conversation on identifying some of today’s most common operational challenges and discover innovative, practical solutions. The OpX Leadership Network offers a variety of free tools, webinars, presentations and articles, including the OEE Starter Tool, Factory Acceptance Tests Checklist and Total Cost of Ownership Playbook. These unique resources can assist middle market companies in justifying their equipment changes while managing profit margins effectively.

Mid-size makers of goods, as well as mid-size OEMs, can also benefit from attending and exhibiting at PACK EXPO International. The show (Nov. 6-9; McCormick Place, Chicago) provides the opportunity to meet with a wide array of solutions providers and potential partners from multiple industries. Having so many industries and respective technologies in one place also affords the opportunity for cross-pollination of ideas.

1http://www.pmmi.org/files/Research/2014RoboticsExecSummary.pdf
2http://www.pmmi.org/files/Research/2014RoboticsExecSummary.pdf
3http://www.gallup.com/businessjournal/162953/tackle-employees-stagnating-engagement.aspx
4http://www.opxleadershipnetwork.org/workforce-development-engagement/download/workforce-engagement

About PMMI
PMMI, The Association for Packaging and Processing Technologies, represents the voice of more than 750 North American manufacturers of equipment, components and materials for processing and packaging. We work to advance a variety of industries by connecting consumer goods companies with manufacturing solutions through the world class PACK EXPO portfolio of trade shows, leading trade media and a wide range of resources to empower our members.

About the National Center for the Middle Market
The National Center for the Middle Market is a collaboration between The Ohio State University’s Fisher College of Business, SunTrust Banks Inc., Grant Thornton, and Cisco Systems. It exists for a single purpose: to ensure that the vitality and robustness of Middle Market companies are fully realized as fundamental to our nation’s economic outlook and prosperity.

Popular Sponsored Recommendations

Four Common OT Cybersecurity Pitfalls for Manufacturers

April 4, 2023
For the last six years, Dragos has leveraged their Professional Services team to develop an on-the-ground understanding of the realities facing the industrial community and to...

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

How Manufacturers Can Optimize Operations with Weather Intelligence

Nov. 2, 2023
The bad news? Severe weather has emerged as one of the biggest threats to continuity and safety in manufacturing. The good news? The intelligence solutions that build weather ...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!