October 24, 2007
TBM Consulting Group, today announced the results of its fifth annual “Multinational Manufacturing Pulse,” which found that the half (56%) of manufacturers sampled in six large industrial nations are optimistic about the year ahead and see many opportunities to gain market share through value chain improvements. Nonetheless, the majority (59%) of respondents say they are concerned over cost pressures.
Conducted in the Q3 of 2007, the survey polled 3,082 executives from mid-sized to large firms in six major manufacturing countries in the western hemisphere – the U.S., U.K., Germany, Spain, Mexico and Brazil.
2007 Outlook: Optimism high, opportunity to leverage value chain for growth
The survey revealed that while executives surveyed in the U.S., U.K., Mexico and Spain are optimistic about the future of manufacturing and envision many opportunities, respondents in Germany and Brazil are not as hopeful and expect more challenges in the coming year.
When asked to identify the greatest opportunities in the year ahead, manufacturers felt most optimistic about ‘value chain improvements’ (70%) and ‘new product development/innovation’ (49%). Other areas where respondents foresee opportunities include:
- Global market expansion (38%)
- Business improvement programs (38%)
- Human Capital (38%)
In thinking about the future, more than half (62%) of all manufacturers identified ‘cost pressures’ as the main challenge for 2008, superseding concerns about ‘rising energy costs’ (11%) and ‘quality issues’ (23%). Additionally, more than one third (36%) of respondents cited ‘people issues’ as a source of angst over the next year.
“While cost pressures are always on the minds of manufacturers, this year’s survey reveals a heightened concern,” says Anand Sharma, CEO of TBM Consulting Group. “To compete in the global economy, leaders in these countries are under increased pressure to find innovative ways to manage the cost of doing business. By concentrating on value chain improvements, companies can sustain profitability and become nimble at responding to changes and opportunities in the marketplace.”
Manufacturing productivity up
The majority (91%) of manufacturers surveyed in all six nations reported productivity gains over the past year and identified ‘continuous process improvement (lean)’ as the leading source of improved productivity (U.S. – 52.5%; U.K. – 50%; Germany – 47.4%; Spain – 75%; Brazil – 36.8%; Mexico – 36.3%).
Additionally, when asked to specify the productivity/quality improvement programs being used, nearly three-quarters (72%) of manufacturers identified kaizen as their primary method, up 29% from last year. Respondents also ranked Lean (63%) and ISO Certification (84%) among the top three methods.
Unlike last year’s survey in which new product development/innovation was identified as the leading source of growth, this year, manufacturers cited ‘responsiveness to market’ (20%) as the primary engine for growth.
Similar to last year, resistance to change (40%) continues to be the greatest barrier to productivity improvement followed by a lack of leadership (25%).
Workforce concerns: lack of innovative thinking
Thirty percent of manufacturers polled in all six nations cited ‘lack of innovative thinking’ as the greatest shortcoming of the workforce. Nevertheless, 72% of respondents report that they are ‘somewhat satisfied’ with their companies’ level of innovation.
When asked where innovation is most active in their value chain, manufacturers responded with the following:
- New Product Development (39%)
- Plant Floor (25%)
- New Technology (11%)
Survey participants also identified the following as areas of significant weakness as it relates to the workforce:
- Work ethic/motivation (20%)
- Flexibility/adaptability (22%)
- Technical Skills (16%)
“The value of human capital to an organization should not be underestimated or overlooked, there should be continuous awareness of the state of the workforce and its level of engagement, empowerment and integration,” says Mike Serena, Managing Director, TBM LeanSigma Institute. “Today there is a toolbox full of techniques in the lean factory to activate and compel workers. By encouraging all workers to think, eliminate waste and find ways to contribute and add value, companies will be able to create a compliant, fully engaged workforce.”
About the Survey
The survey is conducted annually by the TBM Institute in order to understand the core concerns of manufacturers in six industrial nations in the Western Hemisphere. This is the fifth year TBM is conducting the survey. This year’s survey was completed in conjunction with The Manufacturer magazine in the U.S. and U.K., Manufactura in Mexico, Produktion in Germany and Elvigia in Spain.
Source: www.tbmcg.com
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