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Survey Identifies Challenges Confronting Manufacturers

As seen in the A.I.M. MassBusiness Magazine.

A recent survey of 2,000 small-to-mid-size manufacturers operating in 18 states, including Massachusetts, identified six key areas critical to competitiveness in the international marketplace. 

The Next Generation Manufacturing (NGM) Survey was commissioned by the American Small Manufacturing Coalition, an association of Manufacturing Extension Partnership centers and partners, and was conducted by the Manufacturing Performance Center. 

The six strategies that manufacturing companies need to adopt in order to survive the recession and the onslaught of foreign competition include: customer-focused innovation, human capital development and retention, superior process improvement, supply chain management, sustainable or green production, and global engagement. 

When measured against world-class performance levels, the survey found that fully one-third of companies with annual revenues of less than $10 million did not measure up to NGM success attributes. For example, only 28% of the small manufacturers believe that "global engagement is highly important," even though overseas markets continue to grow despite the severe economic downturn in the US.

The survey also found that manufacturing companies are not developing comprehensive measurement systems that would allow them to monitor the implementation of essential business functions such as process improvement measurements. Forty-six percent of the firms reported that they had only ad hoc measurement systems in place, or none at all.

Only 16% of respondents said that "sustainability" and green business practices and products are important to their success over the next five years.

And 25% of the survey respondents indicated that they have not figured out how leadership of the company will be transferred to the next generation of management over the next five years, a dilemma that could undermine the viability of up to 80,000 small US manufacturing firms.

The implications of the study are sobering – especially for Massachusetts, where 7,000 manufacturers with less than 500 workers employ more than 167,000 residents.

Fortunately, Bay State manufacturers can get help in taking steps to ensure that their operations will be able to compete in the global marketplace during the years ahead.  A.I.M. and its partners, including the Massachusetts Manufacturing Extension Partnership (MassMEP), offer a range of programs:  assistance in accessing Workforce Training funds, energy conservation services, onsite training programs, international trade assistance, implementation of lean manufacturing practices, and supply chain management techniques. 

The charts on this page are from a report to the American Small Business Coalition by the Manufacturing Performance Institute. Download the full report.

For information regarding A.I.M, please contact Bill Baldino at AIM's Employer's Resource Group, (617) 262-1180 or bbaldino@aimnet.org.

For information regarding MassMEP, please contact Mike Prior at MassMEP, (508) 831-7020 or michaelp@massmep.org.

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