National Manufacturing Study Reveals New Trends, Steps for Success

Portland, Ore. – The Oregon Manufacturing Extension Partnership (OMEP), along with its trade association, the American Small Manufacturers Coalition, this week 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, such as the economic downturn present challenges, manufacturers can remain competitive by focusing on six strategies assessed by the NGM Study as a blueprint for success.

Specifically, the study found:

  • 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.
  • Most manufacturers have systems and equipment in place to support the current requirements of the six NGM strategies, but few describe their equipment as “state-of-the art.” 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.

“The six strategic areas assessed in the Next Generation Manufacturing Study serve as a road map for success to help Oregon manufacturers thrive in the next generation,” said Chris Scherer, OMEP executive director. “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 Oregon’s, and our nation’s economy.”

OMEP provides consulting services to small manufacturers to implement enterprise strategies that support company growth. In the two-year period from July 1, 2009 through June 30, 2011, OMEP assisted 108 Oregon companies. Those businesses reported with OMEP’s help they had created or been able to retain 1,702 jobs, achieved nearly $130 million in new or retained sales and over $17 million in cost savings. The NGM study, first conducted in 2009, and repeated this year, surveyed more than 800 U.S. manufacturers. More information can be found at www.smallmanufacturers.org/2011NGMStudy.

The Six Next Generation Strategies:

  1. Customer-focused innovation: Develop, make and market new products and services that meet customers’ needs at a pace faster than the competition.
  2. 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.
  3. Superior processes/improvement focus: Record annual productivity and quality gains that exceed the competition through a companywide commitment to continuous improvement.
  4. Supply-chain management and collaboration: Develop and manage supply chains and partnerships that provide flexibility, response time and delivery performance that exceed the competition.
  5. Sustainability: Design and implement waste and energy-use reductions at a level that provides superior cost performance and recognizable customer value.
  6. Global engagement: Secure business advantages by having people, partnerships, and systems in place capable of engaging global markets and talents better than the competition.

About American Small Manufacturers Coalition

The American Small Manufacturers Coalition (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/.

About OMEP

OMEP is a not-for-profit team of business and manufacturing professionals – one of more than 60 Manufacturing Extension Partnership resource centers nationwide – that aims to make Oregon companies more competitive. OMEP provides Lean Enterprise training/implementation assistance and industry-driven best practices to a wide variety of industry sectors. A partner of choice for the economic development community, OMEP’s emphasis on strengthening and transforming companies creates a ripple effect of positive sustainable impact on the business, the workforce and the community. For more information about OMEP, please find us at www.omep.org.