Road to World-Class Manufacturing

By John R. Brandt

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).

NGM Strategy World-Class Status

Source: Next Generation Manufacturing Study

Conversely, far too many manufacturers indicate that their organizations have made “no progress” toward world-class status for the NGM strategies (ranked 1 on a scale of 1-5): For example, 26% of manufacturers have made no progress toward world-class global engagement; 21% no progress toward world-class green/sustainability; 9% no progress toward world-class supply-chain management; and 9% no progress toward world-class engaged people.

Very few manufacturers excel at all six of the NGM strategies. Just 4% of manufacturers report their organizations to be at or near world-class for all six strategies. More than one-quarter of manufacturers (28%) indicate that their organizations are at or near world-class for none of the six strategies.

So why should manufacturers be striving to achieve world-class status with the NGM strategies? Because detailed analysis of NGM data from more than 2,500 manufacturers found that:

1. Firms at or near world-class status are far more likely to place more emphasis on NGM strategies. It all begins with realizing the importance of these strategies.
2. Manufacturers at or near world-class status manage in significantly different ways, including being more likely to use best practices and investing in NGM strategies.
3. Most importantly, firms at or near world-class status in a given NGM strategy typically outperform firms that rate themselves as furthest from world-class.

The opportunity for manufacturers to adopt NGM strategies and achieve world-class performance is urgent — and compelling. What will your firm look like in 2015 if you adopt NGM strategies? Or what will it look like if you don’t?

The NGM Study was coordinated by the American Small Manufacturers Coalition, conducted by the Manufacturing Performance Institute (MPI), and supported by Manufacturing Extension Partnership centers and partnering organizations. If you would like to subscribe to MPI’s NGM newsletter and blog, click here.

© 2010 The MPI Group