Next Generation Manufacturing

Equipment Investments

Many manufacturers have spent the economic downturn nurturing their existing infrastructure, trying to adequately maintain aging business systems and machinery until they see signs that a recovery for their markets and by their customers is clearly underway. But at what point is equipment so unreliable that it is a deterrent to successful business and future growth? Will your company be able to meet demand for your products when it finally reemerges?

The Next Generation Manufacturing (NGM) Study found that 58% of manufacturers had invested 5% or less of annual sales (three-year average) in capital equipment; 10% of manufacturers invest less than 1%. How does your company stack up with this overall view, or the capital-investment practices of better operators: 50% of manufacturers that were at or near world-class process improvement invest more than 5% of sales in capital equipment compared to 35% of manufacturers furthest from world-class status that invest at such levels.

In speaking with a manufacturing executive recently while touring his facility, he pointed out various used equipment that recently had been purchased (at bargain prices) and were being refurbished and placed into action. These acquisitions, he said, would be a decided upgrade over older machinery, which would be refurbished as well and would offer additional capacity that was anticipated and also serve as backups.

You probably know that equipment bargains are available, but credit to purchase machinery is still exceptionally tight. How are you upgrading your operations, ensuring that you can run high-quality products in the volumes needed when needed? Are you finding capital with which to invest? Will you be the one selling off your machinery, or upgrading infrastructure and growing your ability to meet expanding demand? MPI wants to hear how you’re navigating through these precarious manufacturing times.

By George Taninecz, VP of Research, The MPI Group

Stat of the Week: How Important Is Process Improvement?

Of all the Next Generation strategies, process improvement is perhaps the most established and most familiar. In the Next Generation Manufacturing study, 44% of respondents rated their company at or near world class in process improvement.

The Next Generation Manufacturing study also asked respondents to rate the importance of process improvement to their organization’s success over the next five years.

Ninety-seven percent of those at or near world-class in this discipline rated process improvement 4 or 5 (on a scale of 1-5) in importance. This compares to 78% of those furthest from world class.