Friday, January 25, 2013

Challenges for Michigan's Manufacturers

Recently our Federal Sponsor, NIST MEP, posted an article called Challenging Times. In it, Ken Voytek shared some data gleaned from clients surveyed across the MEP network. As part of the survey and to help inform MEP new products and services, clients are asked to identify the top 3 challenges their companies face over the next three years. As Mr. Voytek stated, the answers paint an interesting picture of what keeps manufacturers up at night.

We wanted to see if Michigan’s manufacturers were dealing with the same issues, or whether there might be something unique about our challenges and opportunities. Here’s what we found, based on responses from 904 Michigan clients over the last four years:

The top three categories identified as challenging for manufacturers in each year surveyed were Product Development, Growth Opportunities, and Cost Reductions. The first thing that became clear was that FY2010 was a unique year for MMTC’s client base. Unlike most years where there was a clear ‘front runner’ on challenges, clients reported a pretty even distribution among the historically big three categories – each earning a 47.3%, 46.5% and 46.2% respectively. Sustainability, Finance and Employee recruitment rated between 13 and 10% each, with Exporting, Managing Partners and Suppliers, and Technology rounding out the bottom with 9.6% to 6.9% of clients indicating a challenge.

Compare that nice, even distribution with any other FY, where Michigan’s manufacturers report Cost Reduction as the #1 challenge, between 74.6% in FY 2008 and 72.6% in FY2012 indicating its consistent designation as an obstacle to overcome. Growth and Product Development also receive consistently high marks, typically above 50%. If we were to take these two together, the picture shifts slightly. In every FY, Michigan Manufacturers make this [product development/growth] the #1 challenge – with almost 100% of the companies indicating this as a need.

Consistent with the National numbers, Michigan has seen an increase in the number of manufacturers concerned about employee recruitment and retention. In FY2008, 7.5% of companies identified it as a challenge compared to FY2012 where that number rose to 39%.

With the exception of FY2010, Sustainability has been identified by roughly 24% of manufacturers annually.

We're still wrapping our arms around these trends to see what we can learn, and more importantly, how we can share that knowledge with our clients.

What are YOUR Top Three Challenges over the next three years. NIST MEP is reviewing the challenges now. Is there something you would add? Remove?  

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