Quality Magazine

National Manufacturing Study Reveals New Trends, Steps for Success

October 31, 2011

MADISON, WI-Today, the Wisconsin Manufacturing Extension Partnership, along with its trade association, the American Small Manufacturers Coalition, 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, like the economic downturn present challenges, manufacturers can remain competitive by focusing on six strategies assessed by the NGM Study as a blueprint for success (see sidebar).

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% of manufacturers reporting that sustainability is important or highly important to their future, up from 35.1% 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% have state-of-the-art equipment to support world-class innovation, and just 14% 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.

    “Wisconsin developed the NGM concept and continues to identify new opportunities to help manufacturers in our state,” says WMEP Executive Director Buckley Brinkman. “We believe the six key NGM elements define the areas critical for success, and this study shows how our manufacturers can improve in the future. The WMEP looks forward to helping Wisconsin keep its lead in American manufacturing.”

    “Next Generation Manufacturing programs led by WMEP have produced results from every department throughout the organization,” said Mary Isbister, president of GenMet Corporation, a metal fabricator based in Mequon. The company initially focused on one specific strategy – Superior Processes/Systemic Continuous Improvement – to drive a lean transformation, the results of which surpassed expectations. Isbister describes some of the quantifiable returns: “We went from an average of 9-12 inventory turns per year to 33 turns. We cut lead-times on most of our products in half and we reduced our finished goods inventory by 90%. Today, we carry essentially zero finished goods inventory.” Isbister attributes these results directly to GenMet’s Lean Transformation which she says took approximately four years to be fully integrated.

    Isbister adds that commitment to Next Generation Manufacturing requires full buy-in from all employees. “These strategies are now part of the GenMet culture.” Leveraging its success in systemic continuous improvement is now driving the company to focus on the next improvement project - Six Sigma, as well as work in the areas of Profitable Sustainability and Global Engagement exporting.

    The study, first conducted in 2009, surveyed more than 800 U.S. manufacturers. More information can be found at www.smallmanufacturers.org/2011NGMStudy.