The Biggest Challenges Facing Manufacturers -- IndustryWeek's 2008 Salary Survey Responses

Feb. 9, 2008
Offshore competition. Finding and retaining skilled labor. Rising costs. Government regulations. Sound familiar? Manufacturing managers share many of the same headaches and confront common challenges.

As part of the IndustryWeek 2008 Salary Survey, we asked the open-ended question: What is the biggest challenge facing the manufacturing industry today?

Following are nearly 1,000 anonymous responses from IW readers, expressing in no uncertain terms what exactly is at the top of their to-do lists. (Comments have been lightly edited, mostly for clarity).

supplier costs and offshore competition

attracting talent

finding good people, increase in cost of raw materials

skilled labor force; imports

input costs -- material, energy, and people related costs

global competition

competition from outside the U.S.

corporations

remaining cost competitive

job stability

changing culture

China / offshore manufacturing

material costs and skilled labor

increases in raw material pricing

technical engineering talent / global demands on raw materials

people

managing outsourced/extended supply chains

China

too much capacity

people

availability of skilled help

trained staff

loss of jobs

unions & finding skilled workers

3rd-party suppliers providing substandard parts

finding qualified personnel

cost of doing business

worldwide competition

healthcare

remaining cost competitive

quality and region to build

input costs that are beyond our control are out of control

quality

taxes

cost

high material costs - copper and oil

education/availability of skilled people with the right attitude

finding good management

rising fuel costs

overseas deliveries

making production

globalization and discontent of U.S. labor

China and costs

imported goodsensuring a constant stream of material to support the manufacturing.

costs and lean activities

competition

competitive challenges

finding operators who are skilled and want to work in mfg

margins and low-cost countries

marketing worldwide, not just domestic

low-cost countries

supply chain management

cost of goods sold

escalating raw material prices especially plastic resins

volatility of raw materialsoversees competition

high turnovereliminating waste

chasing quarterly resultsfinding qualified persons

foreign competition

staying competitive

competition from low-cost countries

low-cost Asian competition

outsourcing to low-cost countriescosts

financial viability in competitive market

decreasing innovative talent pool

no importance to society

managing overseas procurement logistics and deliveries

changing customer expectations

outsourcing

competition

new equipment up grade

outsourcing

economy

foreign manufacturing

doing ever more with less

cost, skilled people

variable constraints

outsourcing

qualified maintenance personnel

talent

retaining employees

offshore sourcing

recruiting talented people

labor

hiring skilled employees

talent

finding quality people

cost and qualified personal at what we are willing to pay

staying abreast of new skills, technology

outsourcing

adjustment to offshore threats

wages and benefits

supply chain coordination

lack of confidence in U.S.-made products

supplier consolidation and rising manufacturing costs

China

shortage of qualified people

retaining good employees

competing with Asian vendors

costs - energy, raw material

labor cost as percentage of selling price

overseas competition and outsourcing

manufacturing moving offshore

employees and taxes

innovative talent

outsourcing

imports

obtaining reasonable rail rates

finding good people

quality

outsourcing to low-cost countries

finding excellent employees

healthcare costs

competitive pressure from Mexico/China

shortage of technical support

labor cost and medical cost

low-cost, domestic suppliers

younger generation not interested in careers in mfg

qualified labor force

U.S. economy

labor pool

shortage of skilled labor

personnel training

skilled workforce

quality of people entering manufacturing - work ethic

outsourcing

cost

market flex

optimizing supply chain

skilled labor

rising costs of raw materials in slowing economy

offshore manufacturing

imports

keeping jobs in the U.S. staying competitive

managing costs, winning new business

lack of qualified employees / Chinese imports

competing in a global marketplace

quality

qualified and energetic employees

cost vs. price

cost

offshore manufacturing

outsourcing

people

high petroleum costs

the economy

lack of investment in technology and teaching of that to others to grow manufacturing

offshore competition

lack of capital investment in U.S.

loss of work

too many government regulations with no societal gain

heavy industry moving oversees

getting better everyday

quality and price

finding quality employees

improving quality

taxes

China, trade treaties, poor domestic quality

Chinese imports

China goods, productive U.S. labor

inventory control

cultural change to leanimports

cost

global competition

training, cultural change

labor force

offshore competition

economy

speed

attracting new talent (engineers) in this industry

global competition

low cost of Asian-based competition

employee retention

regulation

cost

the de-industrialization of America

quality employees

cost competitiveness

increasing costs

raw material escalation

capital investment

rising raw material cost

low employee labor pool skill levels

global cost structure and quality from suppliers

poor management

labor supply

remaining competitive in the face of increasing compliance reporting that is a non-value added activity

imports

outsourcing to low-cost countries

loss of technical manufacturing skill sets

material management

pricing/decreased profit margin

offshore competition - wages, healthcare

outsourcing to foreign countries

hiring quality people

profit pressure

getting new talent

skilled workforce

competition

qualified workers

motivated employees / availability of qualified technicians to keep processes and instrumentation on-line

national economy; labor force; international turmoil

offshoring competitors

skilled workforce

competitiveness (pricing) with foreign producers

new product development

knowing what to manufacture - what will customer buy

overseas competition

imports from China

raw material cost

outsourcing

updated equipment

quick turnaround

competitive costinflation

outsourcing

offshore suppliers

quality employees

outsourcing to China

low-cost regions/competition

lack of long term focus on core business

foreign competition

competition and the struggle to do more with less.

competition

healthcare

workforce skill set

people resources

cost management/competitiveness

quality, cost of manufacturing

quality of labor

labor work force

erosion of U.S. manufacturing

attitude that manufacturing cannot be done well in the West

passing on increasing costs

profit

political actions causing inconsistent playing field

quality people manufacturing quality products

capital investment

lean manufacturing

matching capacity to demand

qualified workers

a shortage of skilled and educated employees

design for manufacturing

labor costs

China

housing market

international competition and job loss

workforce

inflation

foreign competition

overseas competition

reducing lead-times

rising raw material costs

slowdown in economy

qualified personnel

talent attraction, retention and management

hiring good people

remaining competitive in U.S. manufacturing vs. overseas

training and staffing

raw material costs

executives

good employees

controlling cost and component quality

outsourcing

supply chain / productivity

cheap imports, taxes, government regulations

dependable workers

competition from foreign manufacturers

imports

low-cost imports

raw material cost

cost

offshore

qualified personnel to hire

quality and cost

labor

U.S. consumer and the economy

increase in material costs and healthcare and shrinking profit
margins due to high labor costs

cost reductions passed to smaller manufacturers, capable workforce

being profitable enough to stay in the U.S.

foreign competition

global competition

economic slowdown

overseas trading

China

rising raw material prices

dealing with foreign competition, human resources, and finding
reliable educated employees

finding motivated sales staff

offshore labor rates

quality and costs

foreign manufacturing

talented, capable people

staying up with technology

change management

labor costs, lack of continual improvement

work force

Asian market, new quality era

product moving overseas for all the wrong reasons

budget cuts

rising costs

overseas competition

outsourcing

sales

health insurance

foreign competition

qualified labor

outsourcing

global competitiveness

qualified help

dealing with unions, and competing with low-cost countries

cost

quality raw materials on time

oil prices

cost

cost pressure - China, etc.

cost

foreign competition

hiring skilled and motivated team members

China

accounting rules

skilled labor

healthcare, educated employees, foreign competition

controlling energy costs

imports

competition

competition from low-cost manufacturing

demand for our product

competitioncost control

complacency

costs

foreign labor prices

high prices causing demand to lessen

China

evolving technology and capability to absorb at front line

finding good people

change and controlling the costs of manufacturing

China

salary compensation

Staying innovative, ability to change - one of my biggest challenges is creating personal growth in the company for my staff. We are a pretty small company compared to most and constantly understanding what drives my staff and what they need to feel growth can be tough.

poor image as a profession

high cost of raw materials and labor

control costs

cost increase

government regulations and laws (e.g., FMLA)

retirement of knowledge base, skills

cost

inflation

weakening dollar

cost increase

U.S. recession

competition

keeping the peace

balancing quality and expenses

outsourcing

changes

competing with low-cost manufacturing countries

controlling process consistencyglobal competition

global competition, customers, suppliers

lack of strategic planning

outsourcing to cheap labor

competitiveness

global sourcing management

foreign competition

cost reduction

raw material and energy costs

rising labor/material costs

becoming global and doing it well

leadership, not being penny-wise and pound-foolish

cost

value/cost

qualified employees

constant change of competitive landscape

controlling costs

global competition/people

relocation of facilities overseas

cost of benefits to employees

global cost pressures and attracting young talent

employee morale

labor

costs

government regulations

recruitment and retention of skilled employees

finding and developing workers for manufacturing jobs

global competitors

worldwide sourcing

global competition

accident-free environment

government regulations/interference

changing regulations / inferior imports

production efficiencies/staying competitive/workforce development

senior managements conflicting priorities

global competition

economy

foreign competition

lower labor costs outside U.S.

costs of energy, finding good labor

executives focused on quarterly reports

foreign competition

labor and transportation

outsourcing

climate change

lean sustainment

planning for growth, executing, sustaining

cost-effective innovation

profit erosion because of mature product lines

making products cheaper and more efficiently than our global competitor

U.S. government

availability of skilled labor

efficiency and productivity

balancing quality, delivery and cost performance

downward price pressures

lack of skilled workers

overseas competition

understanding and balancing constraints

price/cost pressures

bad management

people

maintaining control of material costs

adapting to change

retaining talent

the work ethic of the younger generation

finding and retaining skilled workers with below median salaries

energy costs

smart executive management

foreign competition

globalization

material costs and availability

government incentives

raw material shortages

China

imports

market share

hiring and developing great talent

overseas competition

domestic cost to manufacture versus foreign sources

efficiency

maintaining qualified suppliers

China's horrible quality

hiring quality personnel

Eastern labor, and the stigma of "low-cost" outsourcing

healthcare costs

employee development

VP and CEO salaries and perks

management cutting budgets to increase bottom line

remaining competitive in the global marketplace

cost containment

costs

managing change

qualified employees

keeping jobs in America

finding qualified workers

work

3-month management cycles

overseas sourcing

loss of manufacturing customer base to 3rd world countries.

employees lack of international business

being competitive with foreign companies

poor market conditions

weak dollar impacts profitability / need to build export market for our products

Asia competition

cultural change to Lean manufacturing

international competition

competitiveness

outsourcing

reducing costs

foreign competition

global competition

shrinking sales due to foreign competition.

cost increases

competing with other countries

dynamically changing to meet the demands of the industry

overseas competition

days of supply

globalization

rising energy costs relative to product costs

offshore competition

declining sales vs. profit targets

global sourcing

international competition

finding skilled people

global marketplace demands

getting the entire operation to understand the importance of customer centricity

global competition

labor skills shortage

shrinking employee pool

workforce quality

reducing cost

maintaining a competitive cost structure

price of our products - can be made cheaper overseas

aging workforce

cost of labor

cost reductionsinternational competiveness

U.S. manufacturing staying in the U.S.

government regulations

delivering cost efficient quality products to compete with foreign markets

hiring laborers

quality talent for manufacturing/production positions

commodity pricing and low-cost country competition

perception that manufacturing is dying

export of manufacturing to China, India, etc.

imports from China, South Africa

lack of skilled employees

foreign competition

managing the supply chain

retaining qualified people

process and organizational change

changing

fighting the unequal playing field with currency valuation in the global marketplace.

getting good talented people

the economy

cost pressures

retaining good employees

many competitors with shrinking volume

material volatility

moving offshore I feel is unethical to U.S.

cost of materials

pricing pressure from overseas sources

skilled trades manpower

profitable growth

human resources

global competition

commodity costs

lack of workers

foreign trade

global competition

cost pressures from materials, people, and overhead expenses

competent employees

labor

offshore competitors

worldwide competition

outsourcing

low-cost country manufacturing

staffing

price of fuel, utilities

raw material price increases

rising costs

recession

offshoring

China

scarcity of resources

controlling costs

employee buy in

traditional thinking and refusal to change to TPS

skilled employees

challenged to global sourcing

sufficient people resources

young workers with machine/equipment aptitude

skilled labor

Identifying and eliminating waste from all processes

overseas competition

price pressure

global competition

remaining competitive in the face of pressure to use offshore sourcing.

material cost

adapting to rapid change

declining sales

ingredient costs

competitive pricing

unfair trade

China

energy costs and the normalization of the global economy

cost control

poor management

hard competition, labor problem, and difficult and expensive raw industry materials

plant re-locations to the Far East

the graying of the workforce and getting young people into manufacturing to take the retiring persons' positions

rising raw material costs

workforce engagement

China

global economy

finding young engineers that want to work in a manufacturing environment

outsourcing to low-cost countries

undereducated work force

cost competitiveness

regulations, environmental issues

excess domestic capacity due to overseas competition.

being competitive in price and quality with imports

raw materials cost

labor unions

recruiting and retaining the right people

workforce

government regulations, labor, stiff competition, rising cost, slowing economy, where do I begin

imports from China and global competition for materials.

competing in global environment

aging workforce with little interest by the younger generation in manufacturing

staying competitive in a global environment

finding engineers

staffing with competent people

cost management

retaining and recruiting skilled operators

finding good people

outsourcing overseas

economy

delivery issues; backlog

emerging markets

cost, shipping

energy prices

staffing / foreign competition

labor shortage

product prices vs. input costs

overseas competition

commoditization of products

imports

cost to purchase goods made in the U.S.

profit margins

low-cost country competitive products

maintaining a discipline for quality with profit, not just production

outsourcing

having the U.S. be competitive worldwide

finding new leadership

continual improvement

Asian product and their low cost

productivity / creativity

globalization

finding qualified employees

control cost

inventory management

overseas competition

low-cost offshore competition, especially China

having a long-term vision when management feels the need to go for short-term profits

foreign competition

remembering to just get better every day

loss of institutional knowledge

shortage of skilled people

low-cost competition

keeping up with technology while keeping costs low

offshoring

low-cost imports

growth into new markets and new product development

China

receiving purchased goods

foreign competition, people want it faster (between lead times and new products)

remaining competitive globally

maintaining competitiveness in a global market

skilled labor

continually improving

offshore competition

cost

recruitment

technical Skills

lack of quality replacements in the workforce

remaining competitive

foreign competition

personnel retention

global competition

skilled workers

competition with offshore manufacturing

materials costs

low-cost regions

foreign competition

staff

jobs are being lost overseas

skilled employees

manufacturing cost

healthcare cost

people

world competition

transforming from make-to-sell into sense-and-respond companies / lack of mobility in the market

employees

government regulations and healthcare cost

good employees

cost savings

skilled employees

growth

food safety

increasing costs

attracting good employees

manufacturing being sent to China/Hong Kong

quality people

offshore competition and raw materials

safety-first behavior

finding qualified employees

work ethics of employees

talent, knowledge of workers

qualified personnel and gas prices

cost of goods

raw material prices

international competition

raw material cost increase / inflationary pressures

the need for engineering professionals

becoming more flexible, rising raw material costs / fuel

cycle time

change in product design

change

no image in the market

overseas competition - low-cost countries

foreign competition: cheap prices

consolidation

labor force

plant closings / Chinaworkforce

foreign competition

government regulations

finding skilled people

labor cost

shortage of labor

global competition

cost and availability of product and on-time delivery

China

CEOs in corporate America

offshore manufacturing

price competition from low labor countries

raw material costs

globalization

global competition

remaining competitive in the market

complacency

foreign countries manufacturing products cheaper than America can do it

offshore competition

rising costs

labor cost

electric costs

pricing

poor management

remaining competitive

offshore competitive pricing

protecting our environment

keeping manufacturing in the U.S.

competition from abroad

business functions are still disconnected from each other; conflicting functional objectives are not linked to higher level business purposes

rising healthcare costs

lack of qualified and skilled workers

skilled workers

the outsourcing of manufacturing jobs overseas

economy/healthcare

customer base mfg less domestically

E. Coli

metal prices and the market

frivolous lawsuits

offshore sourcing

rising healthcare and petroleum costs

keeping industry in U.S.

making it cheaper

globalization

low-cost geographies / must embrace lean

quality workers

well-qualified employees with "employability" skills

raw material costs

costs

China

controlling costs

employee retention

lack of manufacturing skill

keeping jobs in the U.S.

global competition

costs

hiring qualified employees

cost of energy and derivatives

being in Michigan

imports

foreign competition

keeping costs down

costs for labor and materials

energy costs

MBA's

cost pressure from both raw materials to the industry in general as well as competitive costing from

overseas labor

cost effective labor

foreign manufacturing

the slump in housing construction

finding skilled direct labor

long-term strategies

inflationary prices paid for materials

rising commodity cost

workforce training

parts proliferation

finding qualified applicants with so many of the manufacturing jobs going outside the U.S. - the pool of skilled candidates is shrinking

innovation

quality/price

inflation

unfair competition from abroad

global competition

keeping work in the U.S.

energy/raw material costs

safety

global competition

overseas competition

taxes

skilled employees

unstable oil prices

quality

trend sourcing

cost of materials made from petroleum

overseas competition

knowledge of industry (years of experience) vs. degreed without experience

imports

government intrusion

China

outsourcing

labor costs

low-cost manufacturing

finding skilled workforce

work ethic

products from China

fluctuating cost of raw materials

educating people to see manufacturing as a viable and growing career path

corporate management

our unwillingness to drive costs out of the operations

global competitiveness

competition

skilled employees

competition

material costs in a global market

qualified people

real-world education

work overload

competition from other countries, mainly China

replacement employees

inexperienced people in the workforceglobal competition and supply chain

globalization and rising cost

development of subordinates

skilled labor

China

housing market

people

foreign competition

material costs

leadership development

petroleum costs

low quality finished components from China

offshoring of U.S. manufacturing

technology advancements

metal pricing

Asia

keeping jobs in the states

global competitive pressures

inventory and transportation

government

current economy

low-cost countries

labor costs

accountability in management and need for lean manufacturing

loss of manufacturing due to unfriendly government/business climate

global competition

loss of jobs to offshore locations

inflation

management's attitude toward personnel and development

people

lost of customers = lost of manufacturing jobs

finding qualified people

personnel

labor market

offshore manufacturing

imports

finding capable employees

turnover, competition

foreign competition

supply change management

global competition

cost control and innovation

cost of medical benefits, workers comp and all other insurances

less than adequate government policy support, especially in regards to energy/feedstock supplies

industries moving out of U.S.

competent labor force

human resource Issues

managing the people

closures

lack of government support for manufacturing; legislation like NAFTA, CAFTA, GATT, and the new one pushing our manufacturing further south where slave labor is available

cost of materials

material

maintaining costs to keep job on shore

the technology changes that require a quick response with a product and a low selling price

getting enough qualified candidates

foreign competition

government regulations /politics

the balance of import vs. the market as brand is the only issue vs. the product knock off

no long-term focus -no reinvestment

availability of qualified drug-free workforce

aging workforce

knowledgeable management

reliable suppliers of materials and competent management personnel

stress and frustration of dealing with poor leaders who TRY to lead us

staying ahead of foreign competition

metal prices

maintaining competitiveness

efficiency

being competitive in the markets they serve

keeping manufacturing in the U.S.

quality workforce (recruit and retain) while being cost-competitive

imports

unions; escalating healthcare costs; consultants

maintaining a workforce

competition from low-cost geographies

downtime

efficient integration of the entire supply chain

outsourcing to low-cost manufacturing regions

outsourcing

keeping it in the U.S.

qualified candidates for positions both salaried and hourly

outsourcing

China / loss of U.S.-based manufacturing

R&D

attracting and retaining good talent

offshore competition

Internet

quality control issues

finding and retaining high quality talent

skilled applicants

qualified workers

insurance - health, workers comp

outsourcing

cost pressures

recruitment, training and adopting lean enterprise wide

global outsourcing

price increases

rising cost of doing business

outsourcing offshore

reducing costs while maintaining quality

excess capacity

keeping healthcare costs down

China

commodity pricing and Asian labor advantage

getting and keeping qualified staff

medical cost

foreign competition

rising cost of raw materials

skilled workers

outsourcing to other countries

culture change

cost containment

competitive pressures

finding people

low labor outsourcing

foreign competition

labor costs

keeping costs in check to remain competitive

outsourcing and logistics

adapting to any and all changes

globalization of supply chain

the pace of change

staying competitive with foreign competition

finding capable suppliers

education level of employees

low-cost countries as competitors

qualified help

undetermined business

modernizing without offshoring jobs

sourcing in global markets

culture change

customer spec changes

keeping costs under control

competition from offshore / lower pricing

global competitiveness

currency effects

labor skills and cost

outsourcing

quality

safety

orders

attracting good graduates into manufacturing

increase cost of metals-housing industry

competition from low-cost countries

keeping a manufacturing base in the U.S.

finding personnel who actually WANT to work in manufacturing

low price importsforeign competition

recognition of the importance of manufacturing operations

recruitment

About the Author

Dave Blanchard | Senior Director of Content

Focus: Supply Chain

Call: (941) 208-4370

Follow on Twitter @SupplyChainDave

During his career Dave Blanchard has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. He also serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), which has been translated into several languages and is currently in its second edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

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