Industry Headlines

Survey Takes Pulse of North American Sourcing Community, an online marketplace for the manufacturing community, has announced the results of its latest MFGWatch Survey. More than 200 purchasing professionals and engineers from the manufacturing industry participated in the survey. Survey questions focused on the state of sourcing, sourcing preferences, company growth projections and reactions to economic conditions.

When asked if sourcing needs have changed in the past year, 69% said they had maintained or grown their sourcing needs, while 31% stated their sourcing needs had decreased during this period. Nearly half of the buyers said they were currently in the process of looking for new suppliers, while the other half stated they were not augmenting their supply chain.

Questioned about geographical sourcing preferences, 64% preferred to source with North American manufacturers, 19% favored China for their sourcing needs and 7% conducted their sourcing business in Europe. The remaining 10% were sourcing in South America, Africa and other countries.

Respondents were asked if the volume-both value and quantity-of their orders for sourcing had changed in the past year. Sixty percent of respondents stated their volume had increased or remained the same, while 40% reported a decrease in sourcing volume. Those responding affirmatively to the question were asked why there was an increase in sourcing activity. Forty-five percent of the respondents stated the increase was due to natural company growth, while another 27% found better opportunities for savings. Two percent said that their underlying costs have decreased.

Asked why their sourcing needs had decreased, 58% responded that overall demand had declined, and 18% had experienced budget cuts. Another 13% were re-strategizing their sourcing needs, and 6% have halted new product development. Surveyees also were asked if their sourcing volume had decreased; did they increase the frequency of order? Sixty-seven percent responded No, 5% replied Yes and 28% were not sure.

Survey participants were asked to forecast company growth in 2009. Eighty-two percent expected to maintain or grow their business, while 13% expected a decrease and 5% were unsure.

Surveyees were asked if they had postponed or canceled any major purchases because of the current state of the economy. Eleven percent have not canceled nor postponed any purchases, while:

  • 35% stopped hiring new or replacement employees.
  • 15% canceled software or upgrade purchases.
  • 12% suspended facility expansion in 2009.
  • 15% cut business travel.
  • 8% did not renew memberships in professional societies or industry associations.

    Respondents also were asked what actions their companies had taken to weather current economic conditions:

  • 22% resorted to layoffs.
  • 21% initiated a hiring freeze.
  • 18% shortened shifts and work hours.
  • 10% reduced the amount sourced at one time.
  • 9% reduced the frequency of items sourced.
  • 6% reported no changes.
  • 5% closed facilities.
  • 4% added automation to reduce payroll.
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