State manufacturing survey shows need for upgrades

In a survey of more than 500 Wisconsin-based manufacturers, the Wisconsin Manufacturing Extension Partnership (WMEP), a nonprofit entity dedicated to the success and continued training of the state’s manufacturers, recently found that while many of the state’s firms have made much progress toward next generation manufacturing principles, there is much work to be done.

Next generation manufacturing refers to six principles – customer focused innovation, superior processes and improvement, engaged people, supply chain management, green and sustainability, and global engagement, said Mike Klonsinski, WMEP’s executive director and CEO.

“The Governor (Jim Doyle) and many others have talked about next generation manufacturing but no one really knew what it was,” Klonsinski said. “Part of the mission is to define it. The other part is to look ahead into the future. If Wisconsin is going to be a leader in manufacturing in 2015, what will it need to be a leader then? What do we have to do today?”

Wisconsin is the first state to conduct a survey of its manufacturers to learn what next generating initiatives they are undertaking and what systems they have put in place, Klonsinski said.

“This is the first effort of its kind in the nation that looks forward on strategies on a statewide level, and what are we doing that gives us hope and what do we need to work on,” he said.

Results of the study showed that:

  • More than 54 percent of all manufacturers surveyed said customer-focused innovation was highly important (compared with 84 percent of those manufacturers who identified themselves achieving world-class status on next generation principles).

  • About 52 percent of all companies reported 96 percent or higher of their deliveries were perfect, meaning they were on time, high quality products and met customer specifications (compared to more than 79 percent for world class companies).

  • 46 percent of companies reported strong customer loyalty because of ongoing trust with their people and capabilities (compared to 69 percent of world class companies).

  • 48 percent of all companies reported less than 25 percent of improved productivity in the last three years, but 33 percent reported 26 to 50 percent improvement (compared to 21 percent and 39 percent, respectively, amongst world class companies).

  • 61 percent of all companies said superior performance and improvement focus was highly important (compared to 92 percent of world class companies).

There are many areas within the report where WMEP believes Wisconsin’s manufacturers can improve. They include:

  • 77 percent of manufacturers report that their sales outside the United States have grown by less than 25 percent over the last three years (41 percent of world-class companies report fewer than 25 percent sales growth outside the United States; 32 percent reported 26 to 50 percent).

  • 56 percent of all manufacturers report less than 5 percent of all SKUs were new product launches annually (57 percent of world class manufacturers reported 5 to 20 percent).

  • 29 percent of all manufacturers reported eight or fewer hours of training to each employee per year. 43 percent reported nine to 20 hours per employee.

  • 60 percent of all manufacturers reported global engagement being not important (95 percent of world class companies reported it highly important).

“We believe that we now have a tangible scorecard to measure manufacturing techniques going forward,” Klonsinski said. “We can be out front and we can say ‘Let’s do what we can to get our numbers higher and refine this.'”

WMEP also will present the study’s results to all Wisconsin manufacturers to use as a scorecard for their own operations. The goal, he said, is to help these companies for future growth, expansion and new product launches.

“It’s hard for us to get beyond this quarter or the next quarter and asking if people will be laid off again,” he said. “But someone has got to look at the future and ask if Wisconsin firms will be positioned to go forward when we do recover.”

More information about WMEP and its study can be found at www.wmep.org.

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