Lean and Improvement
Each year, The MPI Group asks manufacturing-plant executives to name the improvement methods (lean, six sigma, theory of constraints, etc.) in use at their facilities. Lean manufacturing has always topped that list, especially in the United States. The percentage of U.S. plants pursing lean has risen from 70% of facilities in 2007 to 75% in 2011. What’s not as clear, however, is the effectiveness of those lean efforts.
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Manufacturing Performance in 2012
A year ago, manufacturing executives expected that their 2012 plant sales would increase by 9% (median) and 10.5% (average), according the 2011 MPI Manufacturing Study. Those projections may yet turn out to be true given recent U.S. Dept. of Commerce data. Despite a modest drop in value of manufacturing shipments from May to June this year, the value of all manufacturing shipments year-to-date rose 5.8% across all industries vs. 2011 (not seasonally adjusted).
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Too Much Overtime?
Manufacturing may not be booming, but the news is better than some naysayers would have you believe. What’s more, with a little optimism and opportunistic planning, industrial growth could be even faster.
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Investing For The Future
With the year half over, many organizations are re-evaluating their investment plans. Are sales strong enough to justify new equipment or information technology? Will continuing uncertainty in Europe temper enthusiasm for new commitments?
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Finding Help in the Supply Chain
Are your supplier practices strong enough to support a deeper relationship, one that allows your company to tap into their production capacities and skills?
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Outsourcing for Growth
Manufacturers with rising sales will look for outsourcing partners in 2012 to help meet rising demand. Which activities are most commonly outsourced?
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Hiring? Think Safety
If your company is adding employees, what’s the top priority for these new workers?
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Are You Hiring Yet?
Recent U.S. economic data indicates decreasing unemployment — which could make the search for critical skills in manufacturing more difficult. But we’re not surprised: In MPI’s most recent U.S. Manufacturing Study, executives across industry forecasted modest growth in employment this year.
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Got Global?
Global trade is a two-way route: Approximately 75% of plants sold overseas in 2011, selling 7% (median) of their total dollar volume overseas. Similarly among U.S. plants, 75% sell overseas, for 5% of total dollar volume sales. How well-connected is your firm with global suppliers and customers? And would tax incentives change your strategy?
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Operations Execution
Manufacturing excellence doesn’t just happen. Plants near or at world-class status are far more likely to pursue improvement methodologies and best practices. How well does your plant execute on process improvement?
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Top Five Performances to Measure
Manufacturers always find it difficult to manage — or improve — what they don’t measure. Just-released findings from the 2011 MPI Manufacturing Study (survey of 322 plants in the United States and abroad) show that while manufacturers are monitoring a range of fundamental operations performances, other key processes and outcomes are ignored.
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Increased Awareness of Sustainability
Manufacturers are far more likely in 2011 to cite sustainability as important to their organization’s success than they were in 2009: 59% rated it important or highly important in 2011 vs. 35% in 2009 according to the 2011 Next Generation Manufacturing Study.
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Who's The Boss
Three out of five manufacturers may replace their chief executive in the next five years. Is your company one of them?
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What’s Your Manufacturing System?
Companies can learn a thing or two about their manufacturing systems from NFL teams.
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Two Top-Performing Industries
The two top-performing industries based on speed, quality, and costs are chemical manufacturers and food manufacturers, according to data from the MPI Manufacturing Studies, 2006-2010.
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How Good Are You?
Do you know how your company and operations compare to peers and competitors? Two cost-effective ways to quickly find out?
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Top Three Operations Programs
What programs and practices are helping your plants to lower costs and improve productivity? You may be surprised by the top three operations practices and programs used by manufacturers around the globe, as identified by the 2010 MPI Manufacturing Study.
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Top Three Outsourcing Targets
Manufacturers today are unlikely to be excellent at every function required to profitably meet customer demand. Outsourcing is here to stay— and the 2010 MPI Manufacturing Study identified the top three outsourcing targets for plants: Transportation, Fabrication, and Information Technology. Should you be outsourcing more — or less?
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The Top Three Inventory-Management Practices
Customer demand is again booming in many markets — and manufacturers are boosting inventories back to pre-recession levels to keep up. Savvy execs at these firms will adopt recognized best practices to guarantee timely deliveries, minimal inventory and maximum cash flow.
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The Top Nine Human-Resource Programs — Keep Employees Happy and Productive
With economies around the world heating up, don’t be surprised to see your employees look for new opportunities. Savvy executives know that they’ll need to offer competitive benefits if they want to retain and attract talent as they grow. The 2010 MPI Manufacturing Study identified the top nine human-resource programs in place at plants around the world.
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How Plants Improve
More than 30 years ago, Philip Crosby declared that “Quality is free,” arguing that achieving high quality — ideally zero defects — is less costly to an organization than poor quality. He made the case that while there are investments required to achieve perfect quality, those expenses pale in comparison to costs for rework, scrap, lost customers, etc.
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Manufacturers Look to Invest in Plants
The Great Recession is not only receding, but perhaps in full retreat. This confirms data from the MPI 2010 MPI Manufacturing Study — fielded earlier in 2010 — showing that manufacturers are reasonably optimistic about their plans for capital-equipment and information-technology (IT) spending in the year ahead.
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If Everybody Wants to Improve, Why Do So Few Know How?
It’s no surprise that most manufacturers recognize the need to improve. Yet recognizing the need for process improvements and executing on that need are very different steps.
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Overseas Activities Increasing
Today’s manufacturers — regardless of size — must source and sell globally to remain competitive. Is your company leveraging foreign markets and foreign vendors?
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Equipment Capabilities Improving
Your competitors are improving the capability of their equipment. What about you? Manufacturers have been improving their equipment capabilities over the last three years, according to data from the 2010 MPI Manufacturing Study.
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Capacity Comeback?
It’s tough enough to manage the bottom line in good times, let alone during the economic storm that hit manufacturers in 2009. Demand withered, customers failed, and piles of inventory rose even as companies slashed production capacity. As a bumpy recovery takes hold (or, perhaps, doesn’t), economists and manufacturers themselves ask: How much further will overall production capacity drop?
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Bump on the Lean Road
Many in the manufacturing community (and the public at large) were surprised — even alarmed — by the string of quality failures experienced by Toyota over the past year. Some even suggested that maybe all those best practices and techniques Toyota pioneered — the Toyota Production System (TPS), practiced around the world and outside of Toyota as Lean Manufacturing — weren’t so great after all.
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Take Us to Our Leader
Manufacturing executives are nervous — and rightly so. Are we out of recession? Are we in danger of falling back in? How can we take advantage of growth opportunities while hedging our bets on investments, payrolls and production capacities?
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Going Global?
We live and work in a global economy. It’s hard to ignore this fact. Simply read the “Made in” tag on most household products or news of how an ailing economy in Greece or Spain worries investors in Sydney, Australia or Sidney, Ohio. Yet surprisingly, many U.S. manufacturers have a taken a backyard approach to their businesses, ignoring the potential that global commerce has to offer them.
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Not So Green
Spring has arrived and trees and flowers are blooming, making everything far greener than just weeks ago — except, perhaps, manufacturers’ strategies. Because for all the hype about green and the need to mitigate industry’s impact on the environment and climate change, relatively few manufacturers are green yet — or doing much about it.
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Road to World-Class Manufacturing
The business strategies and best practices that comprise Next Generation Manufacturing are familiar to most manufacturers. Yet the focus on these six strategies and the execution of best practices to support them varies widely among manufacturers. Data from the Next Generation Manufacturing (NGM) Study makes it clear that a majority of manufacturers are not at or even near world-class status for each of the strategies (ranked 4 or 5 on a scale of 1-5).
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Introduction to Next Generation Manufacturing
The Next Generation Manufacturing Study was developed to better define the strategies and business activities necessary for world-class performance and success into the next generation. More than 2,500 manufacturers across the United States responded to the Next Generation Manufacturing (NGM) Study, a national research effort coordinated by the American Small Manufacturers Coalition (an association of Manufacturing Extension Partnership centers and partners); conducted by the Manufacturing Performance Institute (MPI); and actively supported by Manufacturing Extension Partnership centers and partnering organizations in many states and regions.
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