Survey: North American Manufacturers Cite High Supply Chain Risk

(MFG.com: Atlanta) -- More than one-third of North American manufacturers responding to MFG.com’s most recent MFGWatch survey say they’ve experienced a significant supply chain disruption in the past three months, and more than 70 percent indicate they plan to maintain or increase employment at their plants.

MFG.com, the largest global sourcing marketplace for the manufacturing industry, conducted the two-part survey in October 2009, targeting supply-side manufacturers and buy-side original equipment manufacturers (OEMs) throughout North America. The supply-side survey drew responses from 408 providers of manufacturing parts and services. Purchasing professionals and engineers from 197 OEMs participated in the buy-side survey. An array of industries, including automotive, aerospace, medical, industrial equipment, consumer products, and textiles are represented in the MFGWatch survey.

When asked if they or their customers had experienced a significant supply chain disruption in the past three months, 38 percent of both buy-side and supply-side manufacturers indicated that they had. While more than 50 percent of each audience said their supply chains had been stable, 38 percent indicated a high level of activity in managing and responding to risk.

In terms of specific supply chain risks, buy-side OEMs cited material costs (47%) and supplier stability (39%) as the most important issues to their companies. Supply-side manufacturers identified customer stability as the most important issues by a wide margin (82%). MFGWatch data also indicate that North American manufacturers are seeing business conditions stabilize. While both audiences say they’ve reduced staff during the past three months (suppliers–43%, buyers–28%), they also expect to maintain or add more employees in the coming three months (suppliers–72%, buyers–75%).

“As North American manufacturing emerges from recession and continues to become more global, businesses are finding supply chain risk mitigation and management to be top of mind,” says Mitch Free, founder and CEO of MFG.com. “This survey shows that while extended supply chains are presenting manufacturers with immediate challenges, they are also seeing stabilization in business activity, as evidenced by their expectations to hire more employees.”