Urgency is key for manufacturers’ survival

Beyond the wealth of data contained in the Wisconsin Next Generation Manufacturing Study – the state’s first-ever scorecard on global competitiveness – are findings that warrant the immediate attention of state manufacturers, business leaders and policymakers.

One of the most important conclusions from this groundbreaking study is that Wisconsin manufacturers can compete and win in a 21st century global economy. The study confirmed that Next Generation Manufacturing strategies focused on innovation and transformation across the manufacturing business enterprise are a powerful catalyst for world-class performance and success.

This is true regardless of company size, industry or location.

That’s certainly good news, because early and aggressive adoption of these strategies will fortify our ability to survive the current global recession and thrive when the economy recovers. Before us is an unprecedented opportunity that we cannot afford to ignore.

Next Generation Manufacturing refers to a framework of forward-looking strategies that drive performance and competitiveness. It is future-focused because what is considered world-class today will be standard practice by 2015. I’m reminded of a quote from hockey great Wayne Gretzky who once said, “I skate to where the puck is going to be, not where it has been.”

That intense level of anticipation of what world-class performance will look like in 2015 and our ability to attain it could mean the difference between Wisconsin remaining a global manufacturing leader or falling behind, the latter unthinkable given our reliance on the sector.

Manufacturing contributes $47 billion to Wisconsin’s economy, employs one in six workers and supports thousands of other jobs in related industries such as logistics and transportation. One need only to look at the auto industry to understand the urgent need to transform our state’s manufacturing economy. 

Next Generation Manufacturing strategies reflect the views of industry thought leaders and best practices in place around the globe. They include:

Customer-focused innovation to deliver new and better customer solutions at a faster pace than the competition.

Advanced talent management to gain competitive advantage through best practices in talent recruitment, development and retention.

Systemic continuous improvement to achieve recurring enterprise-wide productivity gains that exceed the competition.

Extended enterprise management to leverage a flexible network of suppliers and partners to provide competitive advantages of speed, cost and quality.

Sustainable product and process development to integrate environmental best practices into company operations and product development to maximize competitive advantage.

Global engagement to secure business advantages through people, partnerships and systems capable of engaging global markets, talent and resources. 

More than 500 Wisconsin manufacturers participated in the Wisconsin Next Generation Manufacturing Study, including 286 firms from southeastern Wisconsin. Overall, the study found that most Wisconsin manufacturers have the right priorities in place and are making progress on the success strategies listed above. But the study also found many firms that recognize the importance of Next Generation strategies but are unable or unwilling to implement them. Companies that are not seriously attempting to meet Next Generation Manufacturing performance benchmarks are at significant risk of disappearing.

Global engagement – international sales, production and distribution – remains a challenge for a majority of Wisconsin manufacturers. With the fastest-growing markets located outside of the U.S., this is a significant growth opportunity for state firms.

The study also revealed a worker training deficit, with only one in 10 respondents providing more than 40 hours of annual training per employee, a level considered world class. Study after study shows direct linkage between world-class performance and workforce training.

Now that we have a scorecard, the next question is how do we improve the score? The study results represent a unique point of convergence for manufacturers and policymakers. Manufacturers need to take proactive steps to implement Next Generation Manufacturing strategies. Wisconsin policymakers can look for ways to help manufacturers put these strategies in place more quickly, and improve policies, programs and infrastructure supporting Wisconsin’s 10,000 manufacturers. 

The study also provides insights into manufacturers’ perceptions of state and regional resources – support services, peer groups and training opportunities – for each of the next generation strategies. In southeastern Wisconsin the highest marks went to superior processes (continuous improvement) with 81 percent of respondents ranking regional resources average to excellent. Global engagement resources garnered the weakest response, with 52 percent of firms indicating regional resources offered minimal to no support. This data will be very helpful in guiding our efforts as we move forward.

Wisconsin is the first and only state in the nation to launch a study of this scope and magnitude, and that in and of itself gives us a competitive advantage over other states and regions. The time to act is now. Three years from now may be too late. 

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