WASHINGTON, D.C., June 11, 2009 – A national study released today by the American Small Manufacturers Coalition (ASMC) identifies critical threats to the ability of U.S. manufacturers to compete and win in a fastc hanging 21st century global economy.

More than 2,500 manufacturing firms across the nation participated in the Next Generation Manufacturing Study, a research effort coordinated by ASMC and member Manufacturing Extension Partnership (MEP) centers. The study is the first step in a long-term effort to help U.S. manufacturers survive the recession and renew America’s manufacturing leadership over the next decade.

Next Generation Manufacturing refers to a framework of six strategies essential for global competitiveness today and in the future. The strategies are customer-focused innovation, systemic continuous improvement, advanced talent management, global engagement, extended enterprise management and sustainable products and processes. The study included a 61-question web-based survey that asked manufacturers to rank their progress in these areas. “The results are a wakeup call,” said Michael Klonsinski, ASMC board chair and executive director of the Wisconsin MEP. “The consequences of inaction could trigger even more job losses in manufacturing and ultimately a lower standard of living for all Americans.”

Among the key findings: 

  • A serious gap exists between the strategies U.S. manufacturers believe are critical to their future success and their actual progress in implementing those strategies. More than a quarter of American manufacturers – representing more than 90,000 firms – are at risk because they are not at or near worldclass performance levels in any of the next generation strategies.
  • Small and midsize manufacturers are less likely than larger firms to be at or near world-class status in each of the next generation strategies. One third of respondents with less than $10 million in annual revenue are not at or near world-class in any strategy, in contrast to 14% of respondents with more than $100 million in revenue. In a country where 282,000 small and midsize firms comprise the backbone of the industry, this is a significant threat to U.S. competitiveness and the viability of these companies.
  • Green/Sustainability ranks low among the strategic priorities of U.S. manufacturers despite increasing government regulation, growing consumer demand and new requirements from large manufacturers in their supply chains. Only 16% of respondents rank green/sustainability as highly important to their success over the next five years. Another 16% said it was not important.
  • Only 28% of respondents believe global engagement is highly important despite a near-term future in which markets, talent, competitors and partner opportunities are growing faster outside the U.S. than within its borders.
  • Leadership loss represents a significant threat – or opportunity. One quarter of respondents say a planned leadership succession will occur within the next five years – potentially impacting 80,000 U.S. manufacturing firms. Another 29% think a succession may occur. This transition represents an opportunity to inject new ideas, energy and skill sets into these firms but also represents a significant risk where a succession plan is not place.
  • Measurement systems are inadequately deployed. Even in one of the most fundamental and easiest-tomeasure areas – process improvement – 46% of the respondents had no or only ad hoc measurement systems.
  • Effective partnerships with employees, suppliers and regional support organizations are the exception rather than the norm. For example, the majority of respondents engage less than half of their employees in improvement initiatives, falling short of industry best practices that require company-wide participation.

To download more information on the study and findings, visit www.smallmanufacturers.org.

Challenges real, not insurmountable Manufacturing employs 13 million Americans and drives job growth in supporting industries such as logistics, marketing, transportation and business services. Manufactured goods represent two-thirds of U.S. exports and drive more net wealth creation than any other sector. Yet even before the recession, the nation’s manufacturers were facing intense international competition and a host of other challenges. “The solution is not to shift away from manufacturing, but to transform our manufacturing base into a faster, more flexible industry capable of capturing global market share,” said Klonsinski. “The good news is that many manufacturers are already adopting next generation strategies and becoming stronger, more profitable firms as a result. The challenges we’re facing are real but not insurmountable.”

Business leaders, manufacturers and industry thought leaders say Next Generation Manufacturing represents a way forward for U.S. manufacturers. “Manufacturers that focus on achieving world-class status in Next Generation Manufacturing strategies are leaving their competitors behind,” said John Brandt, CEO of the Ohio-based Manufacturing Performance Institute (MPI), a global research firm that conducted the study. “They manage differently, implement best practices at far higher rates and outperform their non-world-class peers on a wide array of operational and financial metrics.” The study results provide a wealth of data for manufacturers, business leaders and state and national policymakers. Manufacturers can see how they rank against performance benchmarks and target improvements where needed. Knowing where the critical needs are, policymakers can strengthen and improve programs and services supporting manufacturers, said Klonsinski.

The ASMC study was spearheaded by MEP centers in 18 states including Florida, Illinois, Kentucky, Maine, Massachusetts, Missouri, New Hampshire, New Jersey, North and South Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont and Wisconsin. About ASMC The American Small Manufacturers Coalition (ASMC) is the national trade association of MEP Centers and partners. MEP is a national network of centers in 50 states and Puerto Rico focused on improving the competitiveness of U.S. manufacturers. These centers provide small and midsize manufacturers with public and private resources and services to promote growth, innovation and productivity.

For more info visit www.smallmanufacturers.org

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