Update on how manufacturers are generating annual productivity and quality gains
The NGM Study provided an optimistic outlook on the process improvement capabilities of manufacturers. An overwhelming majority of manufacturers recognize the importance of process improvement and approximately 43% report that they are near or at world-class improvement. The study identified three elements necessary for world-class process improvement. They are strategy, talent and talent-development programs, and capable business systems and equipment.
Seventy three percent of manufacturers have a company specific strategy for process improvement, and 26% report full functional involvement and buy-in for that strategy. In addition to having a company specific strategy, a majority of firms report sufficient talent to carry out that strategy. Only 14% of manufacturers, however, report that their business systems and equipment are capable of supporting long-term operations. A majority do have the business systems and equipment in place to meet existing needs.
Workforce engagement in the organizations improvement methodologies remained largely unchanged from 2009. With 34% reporting less than a quarter of the workforce was engaged (compared to 33% in 2009) and 45% reporting the majority of their workforce was engaged in the company’s improvement methodologies (compared to 44% in 2009).
Manufacturers’ success in process improvement has resulted in satisfied customers. Only 2% of firms indicate customers are threatening to pull business and 83% described their customers’ satisfaction as favorable. For half of manufacturers, 96% of orders reach customers on time, of high quality, and to all customer specifications. Still, a quarter of manufacturers reported 90% of orders reached customers in perfect condition. There is still room for improvement among some manufacturers in making on time, high quality, and to customer specifications deliveries.
Productivity often also increases as manufacturers emphasize process improvement. Over the past three years, half of manufacturers have improved productivity by more than 25%. This was a drop of 3 percentage points from 2009, indicating manufacturers may need to improve their productivity in the future.
IMEC’s team of manufacturing specialists is available to discuss ways yield the best results from process improvement efforts. Give one of us a call today and we’ll sit down with you to determine the best plan of action for your company.
