Benchmark Study Provides Supply Chain Snapshot

The MPI Group, in partnership with the American Small Manufacturers Coalition (ASMC), has released the results of the 2011 Next Generation Manufacturing (NGM) Study.

The NGM Study results offer a “scorecard” for U.S. manufacturers by which to measure progress in defining strategies within their organizations, implementing best practices to support those strategies, and then achieving performance improvements that can move them into the next generation. A key step in any manufacturing improvement initiative is to benchmark and compare performances; the NGM Study provides these benchmarks.

“Following the NGM path—or ignoring it—will likely be the difference between success and failure for individual manufacturers and U.S. manufacturing in general,” said John R. Brandt, CEO, The MPI Group.

Manufacturers across the country identify superior process improvement (86 percent of manufacturers rated it “highly important” or “important”) and customer-focused innovation (85 percent) as the most important NGM strategies to their firms’ success over the next five years. The perceived importance of sustainability increased by 24 percentage points since the 2009 NGM Study. The perceived importance of supply-chain management and global engagement also increased. But many firms still ignore NGM strategies or pay little attention, noted Brandt.

According to Brandt, many manufacturers are progressing toward world-class status with individual NGM strategies (rated 4 or 5 on a scale of 1-5, where 5 equals world-class), but there is a large execution gap — the difference between the number of firms that recognize the importance of a particular NGM strategy and the number of firms near or at world-class status in that strategy.

For example, 72 percent of manufacturers believe supply-chain management is important or highly important, but only 29 percent of manufacturers are near or at world-class status in supply-chain management. The execution gap represents a substantial barrier to long-term success for U.S. manufacturing.

Many U.S. manufacturers lack key success factors — talented people, business systems and equipment, company-specific strategy — and face competitive disadvantages, the study concludes:

“32 percent of manufacturers have no strategy for global engagement, 25 percent have no strategy for sustainability, and 15 percent have no strategy for human-capital management.”

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