One of the realities brought home by the worldwide recession is the fact that the economy truly has gone global. Manufacturers who fail to adjust their business models and adapt will be unable to compete. Many believe American manufacturing is at a crossroads. Driven by 282,000 small and midsize manufacturers — the backbone of U.S. industry — many of which lack the resources to meet the demands of global competition, American manufacturing must step up to the plate or find itself struck out by better prepared foreign competitors.
In our August 21 post, we talked about six essential next generation strategies identified by the American Small Manufacturers Coalition from a survey of 2,500 U.S. manufacturers. An online article on the Material Handling Industry of America (MHIA) website pointed out several of the most challenging threats to the viability of U.S. manufacturing revealed by the Next Generation Manufacturing Survey.
- Too few manufacturers, only 28%, recognized the importance of global positioning. The days when the U.S. dominated world manufacturing are gone. The torch has passed to China, India and other emerging powerhouses. The reality is that market demand, talent pools and competitive opportunities are growing outside U.S. borders and declining within. The greatest opportunities lay in forming global alliances.
- Too many U.S. manufacturers failed to recognize the growing importance of green operations and sustainable product and process development. Only 16% of survey respondents considered eco-friendliness important to their success with a like percentage denying its relevance. The reality is that consumer demand for green and sustainable products is increasing. Government regulation will mandate change if manufacturers fail to adapt.
- U.S. manufacturers are clinging too tightly to the old management from the top down model. Too few manufacturers are taking competitive advantage of the opportunity to partner with employees, suppliers, even competitors. Less than half of survey respondents engaged employees in improvement efforts; less than a quarter sought supplier input. The reality is that productivity and innovation improve when employees, suppliers and customers are fully engaged. Future success will belong to the collaborators, not the mavericks.
The majority of American manufacturers seem to have stuck their heads in the sand rather than face the challenges of the future. Those who deny the future are apt to be buried by it.