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Courtesy of Bsiness Week
Today the American Small Manufacturers Coalition (ASMC) released a national study which identifies critical threats to the ability of U.S. manufacturers to compete and win in a fast changing 21st century global economy. More than 2,500 manufacturing firms across the nation participated in the study, a research effort coordinated by ASMC and member Manufacturing Extension Partnership (MEP) centers.
"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 solution is not to shift away from manufacturing, but to transform our manufacturing base into a faster, more flexible industry capable of capturing global market share," Klonsinski said. "The good news is that many manufacturers are already adopting next generation strategies and becoming stronger, more profitable firms as a result. The challenges we're facing are real but not insurmountable."
The study is the first step in a long-term effort to help U.S. manufacturers survive the recession and renew America's manufacturing leadership over the next decade. Next Generation Manufacturing refers to 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. The study included a 61-question web-based survey that asked manufacturers to rank their progress in these areas.
Among the study’s key findings:
• There is a serious gap between the strategies U.S. manufacturers believe are critical to their future success and their actual progress in implementing those strategies. More than 25% totaling over 90,000 companies 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. Respondents with less than $10 million in annual revenue representing 30% are not at or near world-class in any strategy, compared to 14% of respondents with more than $100 million in revenue. With a manufacturing base of 282,000 small and midsize firms comprising 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 28 percent 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. Of the respondents 25% said they anticipated leadership succession to occur within the next five years, potentially impacting 80,000 U.S. manufacturing firms.
• Measurement systems are inadequately deployed. Even in one of the most fundamental and easiest-to-measure areas of 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. 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.
To read the full report, go to www.smallmanufacturing.org
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