Monday, October 22, 2012

Challenges of Small to Mid-Sized Manufacturers in 2012



In an era of global competition, smaller manufacturers face challenges above and beyond the challenges that larger, more established companies face. By definition, small manufacturers are companies making less than $10 million in revenue annually. Based on numbers from the latest Michigan County Business Patterns, roughly 92.28% of Michigan’s SMMs or 11,423 of Michigan’s 12,378 manufacturing establishments meet this criterion. By understanding and confronting these challenges head on, these small manufacturers in Michigan can improve their productivity and profitability.

The 2011 Next Generation Manufacturing Study highlights some of the main challenges that small manufacturers face. They include:

Mfgrs
Supply Chain Mgmt
Talent & Skills Development
Systems & Equip
Small to Medium
25% or approx. 2800 Mi Mfgrs
10% have both
41%
Large
41%
33% have both
65%

  • Supply Chain Management –
  • It is important for manufacturers to develop and manage supply chains and partnerships that provide flexibility, response time and delivery performance that exceed the competition. Almost all manufacturers recognize the importance of supply chain management and collaboration, but only 25% of small manufacturers are near or at world-class supply-chain management. Conversely, 41% of large manufacturers are at the same level.
  • Talent and Skills Development –
  • A mere 10% of small manufacturers have BOTH sufficient talent and skills-development programs. These programs drive work-class human capital management. 33% of large manufacturers have both of these programs in place. Manufacturers near or at world-class status for this category are more likely to have sufficient talent and development programs, state-of-the-art business systems, employees equipped to excel in high performance teams and advanced methods to measure their human capital returns.
  • Systems and Equipment –
  • The tools and equipment that manufacturers use are of course extremely important for profitability. 41% of small manufacturers have business systems and equipment able to support their current requirements for global engagement. A majority of large manufacturers, 65%, have this capability.

Organizations such as MMTC are in place throughout the nation to help manufacturers overcome their challenges. MMTC has 5 regional offices throughout the state of Michigan who assist small to medium-sized manufacturing companies. MMTC offers services to help implement and track improvement strategies. Our goal is to transfer our knowledge and expertise to our clients and drive innovation. To find out more about services offered to small and mid-sized businesses, click here.


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