Next Generation Manufacturing

Time for Talent?

With signs of unemployment decreasing, human-capital management again will be critical as manufacturers rush to get staff on board and upgrade workforce skills. They would do well to focus on three elements identified by the Next Generation Manufacturing Study as necessary for world-class human-capital management:

• Strategy: 56% of manufacturers have a company-specific strategy for human-capital management, yet 15% of firms have no strategy. Three-quarters of manufacturers near or at world-class human-capital management (77%) have a company-specific strategy.

• Talent and development programs: 50% of firms have the talent to drive human-capital management into the next generation. Seventy-three percent of manufacturers near or at world-class human-capital management have the talent to drive human-capital management.

• Business systems and equipment: 9% of manufacturers report that their business systems and equipment are state-of-the-art and can support human-capital management long-term, and another 58% report that systems and equipment meet current requirements. Nineteen percent of manufacturers near or at world-class human-capital management report that their business systems and equipment are state-of-the-art, and another 69% report that systems and equipment meet current requirements.

Does your HR team have the strategy, skills, and business systems to find the right talent in 2012?

By George Taninecz, VP of Research, The MPI Group

Got Global?

President Obama recently encouraged American manufacturers to bring production back to the United States, promising new tax proposals to encourage “insourcing.” That’s a lot of potential insourcing — because the vast majority of manufacturing plants import material and/or components from outside their home countries.

In fact, 75% of U.S. and international plants in the 2011 MPI Manufacturing Study import goods from other countries, representing 10% (median) of their material and components (as a percentage of dollar volume). Among the U.S. plants in the study, 76% import from outside the United States, representing 8% (median) of material and components.

China is the source of choice for outsourcing; 59% of plants imported materials and components from China in 2011, importing 2% (median) of material and components. Among U.S. plants, 56% import from China, for 1% (median) of their material and components.

How well-connected is your firm with global suppliers and customers? And would tax incentives change your strategy?

by John R. Brandt, CEO, The MPI Group

How well-connected is your firm with global suppliers and customers? And would tax incentives change your strategy?

Of Interest to Manufacturers

Cloud computing is the most important data storage advancement in many years. If wielded correctly, the cloud can expand your control over your business while lowering your software costs. Here are 10 questions to ask before implementing cloud ERP software. From Manufacturing Business Technology.

What would happen if we could generate power from our windowpanes? This TED Talk shows what the future holds if we want to get off the grid. In this moving talk, entrepreneur Justin Hall-Tipping shows the materials that could make that possible, and how questioning our notion of 'normal' can lead to extraordinary breakthroughs. 

Who do you trust more with your data: Facebook or a bank? The Society for Worldwide Interbank Financial Telecommunication (SWIFT) proposes a new way to store your data online that would let Web surfers store and manage their own data, much like money in a bank account, and selectively lend it to companies that provide a benefit in return. Business Week online has the story.

Kevin Dewalt writes of his experiences as a D.C. tech entrepreneur at his blog, From the Start-up Trenches. He published a two-part essay on the difficulties of creating a lean start-up company. Visit his blog and read "Why Lean Startups Are Hard Part 2 — Pivoting How We Think."

Do continuous improvement initiatives drive financial benefits for manufacturers? And if they don't, why bother with them? The answer to the first question is an unequivocal "yes," according to recent research, which renders the second question moot. The survey, conducted for IndustryWeek and TBM Consulting, looked at the impact of continuous-improvement programs on three financial metrics.

Stat of the Week: Why Manufacturers Seek Outside Help

Manufacturers, whether small or large, routinely seek external support from outside organizations. And a majority of manufacturers report that their organizations have been positively affected by industry associations, state manufacturing associations, Manufacturing Extension Partnerships and consulting firms.

Here, according to the 2011 Next Generation Manufacturing (NGM) Study, are the disciplines for which manufacturers are most likely to seek outside assistance:

• Regulatory/compliance issues (67% of manufacturers)
• Operations improvements (64%)
• Workforce skills development (64%)
• Strategic planning (52%)
• Innovation/R&D (52%)
• Business development (52%)

The NGM study was prepared by The Manufacturing Performance Institute on behalf of the American Small Manufacturers Coalition.

A free copy of the NGM Study executive summary is now available for download.

Of Interest to Manufacturers

Why is the outsourcing of manufacturing such a tough process to manage, even during the best of times? Companies might have conflicting reasons for outsourcing in the first place, leading to misaligned priorities. Read the full post at SupplyChainBrain.

Social media tools offer a new test for leaders when it comes to dealing candidly with employees, especially amid economic insecurity. Bloomberg Businessweek offers this point of view on trusting a CEO in the Twitter age.

Every day, we make decisions that have good or bad consequences for our future selves. TED speaker Daniel Goldstein makes tools that can help us imagine ourselves over time, so that we make smart choices. In these still-uncertain economic times, we need all the tools we can get. Watch The Battle Between Your Present and Future Self from Manufacturing Business Technology.

Kevin Dewalt writes of his experiences as a D.C. tech entrepreneur at his blog, From the Start-up Trenches. He published a two-part essay on the difficulties of creating a lean start-up company. Visit his blog and read Why Lean Startups are Hard Part 1 – Our Genes Aren’t Lean.

Forging New Partnerships

RSM McGladrey, a U.S. accounting firm, The Manufacturing Institute, and the National Association of Manufacturers published a joint paper on how to thrive in today's global value chain.The MPI Group provided research, content development, and editorial services to the book-length white paper on how smaller manufacturers can become more global.

Download Forging New Partnerships: How To Thrive in Today’s Global Value Chain.

The Extra Challenges That Small Manufacturers Face

Small manufacturers have claimed for years that they have a tougher road to profitability than larger manufacturers, and new data seems to back them up. This year’s Next Generation Manufacturing Study found that while four out of five manufacturers were profitable in their most recent fiscal year, large manufacturers are far more likely to have solid bottom lines than smaller competitors.

Four out of five U.S. manufacturers

were profitable in their most recent fiscal year.

NGM data also shows that small manufacturers struggle to keep up not only in terms of profitability, but in terms of innovation, talent and skills development, and operational performances, among other areas. Why? Probably because larger manufacturers generally have deeper pockets, allowing them to more easily fund new technologies, new capital equipment, and new talent development programs. That’s not to say that small manufacturers can’t compete; there are great examples across this country and around the world of manufacturing Davids defeating the Goliaths of their industries. But like David, these small but fierce competitors have to be smarter, faster and nimbler just to survive, much less become Goliaths themselves.

For more information on The Next Generation Manufacturing Study, contact John Brandt, CEO of The MPI Group, at jbrandt@mppi-group.net.

For a free copy of the NGM Study executive summary is now available for download.

Of Interest to Manufacturers

Business News Daily reports on research that says small businesses looking for investors should find an angel, as most small businesses that apply to large lenders don't understand or meet lending criteria.

Small manufacturers bet on exports as U.S. companies pushing into foreign markets are leveraging perceptions of American workmanship and a relatively weak dollar. Bloomberg Businessweek reports.

The principle of Respect for People has received greater attention in the lean community over the past several years. Jamie Flinchbaugh offers the 4 myths about the principle of “Respect for People” on his blog, citing how both companies and customers are made up of people, and the best profits and processes in the world are not worth it if they lay waste to people in their path.

Providing real-time data and metrics throughout a manufacturing enterprise is a significant challenge for many manufacturers. This article from Manufacturing Business Technology discusses the impact of delayed visibility of metrics.

Faced with a dearth of skilled labor, more companies are taking employee education into their own hands as U.S. executives considered lack of skilled workers one of the greatest risks their companies faced in 2012. The Wall Street Journal reports on why some companies are chosing to fine-tune the perfect employee.

The Manufacturing Transformation Blog gives manufacturers 6 reasons to maintain global process consistency.

A study found that more than 90 percent of manufacturers are confident that they are ahead of the curve in delivering safety, reliability and sustainability while consumers think otherwise. Find out more at Environmental Leader.

Four Things for Future Success

This year’s Next Generation Manufacturing (NGM) Study shows a quartet of company characteristics that are critical to manufacturing success. For example, the NGM Study examined customer-focused innovation and found that:

• 57% of manufacturers rate customer-focused innovation as highly important to their organizations’ success over the next five years.

• 24% of manufacturers have a company-specific strategy with full functional involvement and buy-in for customer-focused innovation.

• 24% of manufacturers have sufficient talent and development programs in place to drive world-class customer-focused innovation.

• 18% of manufacturers have state-of-the-art business systems and equipment to provide long-term support for world-class customer-focused innovation.

Manufacturers with all four of these characteristics in place for customer-focused innovation are more likely to outperform manufacturers lacking in one or more of these areas. Just 4% of manufacturers have all four characteristics, and members of this small group are more likely to:

• Rate their companies as having achieved world-class customer-focused innovation — 47% have achieved world-class customer-focused innovation vs. 11% of other manufacturers.

• Commercialize their investments in R&D  — 45% commercialize more than one-quarter of their R&D investments vs. 29% of other manufacturers.

• Achieve game-changing market breakthroughs from their R&D investments — 64% report that more than 5% of R&D investment turns in game-changing market breakthroughs vs. 32% of other manufacturers.

These four characteristics relative to the other five NGM strategies correlate to similar performance findings for those strategies. What four characteristics should your company try to attain in 2012?

By George Taninecz, VP of Research, The MPI Group

Of Interest to Manufacturers

'Tis the season for helping your community, and Business News Daily offers business owners and managers advice on how to choose a charity to support.

The proliferation of sustainability rating schemes over the last decade has affected how global companies approach sustainability. This blog item reflects on the role of three of the major sustainability ranking reports in influencing corporate strategy. Environmental Leader has the story.

Put me in, coach—or, rather, put coaches in. Workforce.com blogger Ed Frauenheim predicts a dramatic increase in one-on-one coaching will be one of the key workplace trends of the 21st century.

As the internet and a more global economy erase the 9-to-5 workday, will they also erode the sense of holidays? Bloomberg Businessweek posted this item.

When consumers spend now, their dollars are far more likely to flow to goods like cellphones, clothes, or even cars than to services like getting hair cuts, dining, at restaurants or flying on planes. This approach to thrift implies that the recession mind-set continues to influence consumer behavior more than two years into this recovery. The Wall Street Journal analyzes the spending switch and its impact on the economy.

Correctly managing product life cycles can cut costs, reduce required  man-hours, and streamline manufacturing operations. So when is the right time to make your products obsolete? Manufacturing Business Technology gives some insight.