MassMEP Publishes First National Survey of Next Generation Manufacturing

MassMEP (10/8, Healy) – Based on an in-depth national survey of more than 2,500 manufacturers, including firms in Massachusetts, the study identifies six crucial strategies necessary for world-class manufacturing success. The most unique aspect of the ground-breaking study, however, is the evaluation instrument utilized in the study. It provided participating manufacturers with a detailed assessment of how their management practices compare to global industry leaders and can evaluate whether individual firms are implementing the procedures and strategies that will enable them to survive the current economic downturn and succeed in the coming decade…The study identifies six essential strategies:

• Customer-focused innovation: Deliver new and better customer solutions at a faster pace than the competition.
  
• Advanced talent management: Secure a competitive performance advantage by having superior systems in place to recruit, hire, develop and retain talent.
  
• Systemic continuous improvement: Record annual productivity and quality gains that exceed the competition through a companywide commitment to continuous improvement.
  
• Extended enterprise management: Leverage a flexible network of supply chains and partnerships to provide competitive advantages of speed, cost and quality.
  
• Sustainable product and process development: Design and implement waste and energy-use reductions at a level that provides superior cost performance and recognizable customer value.
  
• Global engagement: Secure business advantages through people, partnerships and systems capable of engaging global markets, talent and resources. 
  

Sobering Findings Included:

• Small and midsize manufacturers are less likely than larger firms to be at or near world-class status in each of the NGM strategies. One-third of respondents nationwide with less than $10 million in revenue were not at or near world-class in any strategy, compared to just 14% of manufacturers with more than $100 million in revenue.
• Effective partnerships with employees, suppliers and regional support organizations are the exception rather than the norm. Nationwide, a majority of respondents (56%) engage less than half of their employees in improvement initiatives, falling far short of industry best practices that require company-wide participation. In Massachusetts the results were modestly better, but 40% of respondents still engage less than half of their employees.
• Energy efficiency remains a weak link. Less than five percent of New England firms are at or near world-class status in terms of annual reduction of energy consumption per unit of product output.
• Only 28% of respondents nationwide and 38% of firms in Massachusetts 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.