Quality Magazine

MFGWatch.com Reports Dip in North American Supply Chain Risks

December 8, 2010

ATLANTA, GA- MFG.com has announced the results of its latest two-part MFGWatch survey. For the fifth consecutive quarter, more than one-third of North American manufacturers responding to the quarterly survey said that they have experienced a significant supply chain disruption in the past three months.

Other findings include:

  • North American Buyers in Q3 2010 have shown some improved employment activity. Twenty six percent of large manufacturers state that they have increased employment, an improvement over the 18% from the previous quarter. Conversely, while the 21% that had indicated they had reduced staffs is down slightly from the previous quarter, it is still much higher than those that anticipated any retraction (8%).

  • For the first time since Q3 2009, there are fewer large manufacturers in North America that have experienced a significant supply chain disruption than from the previous quarter. The 40% that stated they’d experienced those disruptions represents a 51% drop from the previous quarter.

  • The number of large North American manufacturers that have repatriated production from low-cost countries – 19% – is only slightly less than those from the previous quarter (21%). However, while this percentage still represents a significant increase from Q1 2010 (12%), recent trade and other economic policies put in place may impact these figures in the first two quarters of 2011 and beyond.

  • North American suppliers for small-and-medium manufacturers reported a higher contraction rate of business conditions, with 19% stating they’d experienced less business in Q3 2010. That number is up from 14% in Q2 , and represents a significant contraction in the North American manufacturing sector. Also, while those reporting growth in their businesses remained flat from Q2 (40%), that number exceeds those that anticipated growth from the previous quarter (27%).

  • In alignment with contracting business conditions, small/medium manufacturers state that they are not hiring. Employment in this sector remained virtually the same in Q3 2010, with 26% adding jobs (compared with 29% in the previous quarter) and 18% reducing headcount in both Q2 and Q3. However realities trumped expectations, as only 5% predicted staff reductions prior to this most recent MFGWatch survey.

  • North American suppliers in Q3 2010 reported less activity from larger sourcing manufacturers under duress from supply chain disruptions than in the previous quarter (37% and 42%, respectively). These responses are in line with large North American manufacturers’ lower reported incidents of actual disruptions. However, the most recent 37% virtually matches the levels reported in the same quarter of ’09.

  • Fewer North American original equipment manufacturers and large manufacturers say that they expect to research bringing production closer to North America in the coming months (33%, compared to 38% in Q2 2010).