Today, the Illinois Manufacturing Extension Center, along with its trade association, the American Small Manufacturers Coalition, released the results of its 2011 Next Generation Manufacturing (NGM) Study, identifying key trends affecting the industry and steps U.S. manufacturers can take now to be successful in the next generation.
The study, conducted by the Manufacturing Performance Institute, finds that this is a critical point in time for U.S. manufacturing, and manufacturers must assess whether they have the workforce, business systems, equipment and strategies in place to successfully compete in the future. While external factors, like the economic downturn present challenges, manufacturers can remain competitive by focusing on six strategies assessed by the NGM Study as a blueprint for success.
According to the majority of manufacturers, it is most important to focus on business strategies to maintain manufacturing’s role as a key driver in the U.S. economy. The NGM survey focused on six Next Generation Strategies:
• Customer-focused innovation: Develop, make, and market new products and services that meet customers’ needs at a pace faster than the competition.
• Engaged people/human capital acquisition, development and retention: Secure a competitive performance advantage by having superior systems in place to recruit, hire, develop, and retain talent.
• Superior processes/improvement focus: Record annual productivity and quality gains that exceed the competition through a companywide commitment to continuous improvement.
• Supply-chain management and collaboration: Develop and manage supply chains and partnerships that provide flexibility, response time, and delivery performance that exceeds the competition.
• Green/sustainability: Design and implement waste and energy-use reductions at a level that provides superior cost performance and recognizable customer value.
• Global engagement: Secure business advantages by having people, partnerships, and systems in place capable of engaging global markets and talents better than the competition.
“The six strategic areas assessed in the Next Generation Manufacturing Study serve as a road map for success to help U.S. manufacturers thrive in the next generation,” said IMEC President, David Boulay. “Helping small manufacturers identify strategic development priorities and overcome challenges within their operations will be key to the industry’s future growth and contribution to the nation’s economy.”
Key study findings include:
• Nearly six out of 10 U.S. manufacturers could have a new leader in the next five years — a five percent increase over 2009. This presents an opportunity for manufacturers to solidify leadership and direction for years to come if they develop their next generation of leaders now.
• Sustainability is increasingly important to manufacturers, with 59.2 percent of manufacturers reporting that sustainability is important or highly important to their future, up from 35.1 percent in 2009. Many of these manufacturers are responding to customer demands for greener products, while others recognize cost-control opportunities such as reduced energy consumption and the re-use of materials.
• Few manufacturers describe their equipment as "state-of-the-art," though most manufacturers have systems and equipment in place to support the current requirements of the six NGM strategies. For example, only 18 percent have state-of-the-art equipment to support world-class innovation, and just 14 percent have state-of-the-art equipment to support world-class process improvements.
• Few manufacturers have both talent and workforce development programs to drive world-class performance. Due to an aging workforce and gap in skilled labor, more professional training and development is needed to prepare manufacturers for the next generation.
• Small companies need assistance in implementing NGM strategies. Smaller manufacturers are less likely than larger companies to be at or near world-class performance in the six NGM strategies, and are less likely to have best practices in place.
A majority of U.S. manufacturers surveyed said they look for outside help in a range of areas, such as regulatory compliance and business development, to achieve success. In addition, a majority say that their organizations have been positively impacted by state manufacturing associations and Manufacturing Extension Partnership centers, such as IMEC. IMEC helps Illinois manufacturers develop and implement strategies in these six areas through customized training and consultation services.
If you are looking for ways to improve your company's competitivenss, contact an IMEC representative to learn more about how the NGM strategies can be applied to your business.
Look for our next blog discussing the study’s findings on profitability, leadership, and investment issues facing manufacturers.