Next Generation Manufacturing Study Reveals Opportunities for U.S. Manufacturers to Excel

MORRIS PLAINS, NJ – On October 4, 2013 the American Small Manufacturers Coalition (ASMC), in conjunction with Manufacturing Day, released a summary of its results from the 2013 Next Generation Manufacturing (NGM) Study. The NGM Study measures manufacturers’ readiness, support systems and resources, and performances in six key strategic areas necessary for world-class manufacturing and future success.

The Manufacturing Performance Institute (MPI), part of The MPI Group, conducted this research based on recent survey responses of manufacturing executives. The current data shows that manufacturing organizations that achieve world-class status in at least two of the NGM strategies and maintain industry-average levels in the other four areas are in the best position for long-term survival.

However, the 2013 data finds that most of these manufacturers – successful as they are today – aren’t investing in the strategies that will carry their firms into tomorrow.

“The study data identifies an enormous execution gap – the difference between the numbers of firms that recognize the importance of a particular NGM strategy, and the number that comes close to or that achieved world-class status in that strategy,” said John Brandt, Founder & CEO of MPI.

For example, the study found:

• 90% of manufacturers believe superior process improvement is important, whereas only 44% of those manufacturers are near or currently at world-class status in process improvements.
• While human capital management is an issue, NGM data suggests few manufacturers are taking initiative to address talent shortages: 69% of manufacturing executives have the leadership and talent to drive world-class customer-focused innovation, but only 37% have talent development programs to support world-class customer-focused innovation.
• Most manufacturers have the tools, technologies and business equipment they need today, but those tools won’t meet the needs of the future.  Only 11% of manufacturers describe their tools and business equipment as “state-of-the-art” and capable of providing long-term support for world-class supply-chain management.
• 33% of manufacturing executives anticipate a planned leadership succession in the next five years, and another 28% of executives indicate a succession may occur.
• Similar to 2011, manufacturers continue to seek external support from outside organizations in dealing with a range of activities from compliance issues, to strategic planning, to supply-chain development. Of those manufacturers that have used outside resources they report a positive impact.

“Next Generation Manufacturing teaches us that small and medium-sized manufacturers must continue to transform in order to remain competitive,” according to Robert Loderstedt, CEO of the New Jersey Manufacturing Extension Program, Inc. (NJMEP). “The Next Generation manufacturing study results when looked at as a whole (2009, 2011 and this year 2013) continue to provide perspective and focus for those manufacturers who are serious about world class performance, and benchmarking their progress toward improved performance, productivity and profitability. Understanding their results and putting them in perspective against others who completed the survey, allows us more time with manufacturers to assist them in their journey toward World Class results.”

A New Jersey manufacturer and world-class distributor of a wide range of electronic and fiber optic interconnects wanted to provide world-class training to their employees.   They knew that developing the skills of their workforce would help the company as well as the individual employee. The company would benefit from the training by reduced product problems, product returns, and customer complaints, ensuring more satisfied customers and employees and the employee would gain increased knowledge and the opportunity for job growth within the firm.  Greater internal and external satisfaction would inevitably lead to company growth.  This manufacturer turned to NJMEP for help in developing and implementing a plan that would help them focus on these key objectives.  As a result of their efforts, this manufacturer increased sales by  $500,000, retained $2M in sales, experienced $2.5M in cost savings and hired 10 new employees.

NJMEP’s services are geared towards helping state manufacturers increase sales and profit, reduce costs, improve efficiencies and spur job creation. Since 2000, NJMEP has helped manufacturers realize nearly $2.3 billion in value: $1.6 billion in increased and retained sales, $262 million in cost savings, $332 million in investments and 18,600 jobs created or retained.

The study, conducted in 2009 and 2011, surveyed U.S. manufacturers nationwide.  More information can be found at www.smallmanufacturers.org/news. For more information about NJMEP, visit www.njmep.org.

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About NJMEP: NJMEP is a not-for-profit 501(c)3 organization affiliated with The National Institute of Standards and Technology’s (NIST) Hollings Manufacturing Extension Partnership (MEP), a network of more than 60 MEP centers across the U.S. and Puerto Rico. To learn more about NJMEP visit www.njmep.org or call 973-998-9801.

About American Small Manufacturers Coalition (ASMC): ASMC is a trade association of manufacturing extension agents whom work to improve the innovation and productivity of America’s manufacturing community. ASMC advocates for legislative and programmatic resources that allow its small manufacturing clients to better compete in the global marketplace. For more information, visit www.smallmanufacturers.org.