National Study: Critical Threats to U.S. Manufacturing

Global market and sustainability pose challenges to a majority of firms—small manufacturers especially at risk.

(ASMC: Washington, D.C.) -- A national study recently released by the American Small Manufacturers Coalition (ASMC) identifies critical threats to the ability of U.S. manufacturers to compete and win in a fast-changing 21st century global economy.

More than 2,500 manufacturing firms across the nation participated in the "Next Generation Manufacturing Study," a research effort coordinated by ASMC and member Manufacturing Extension Partnership (MEP) centers. The study is the first step in a long-term effort to help U.S. manufacturers survive the recession and renew America’s manufacturing leadership over the next decade.

Next Generation Manufacturing refers to a framework of six strategies essential for global competitiveness today and in the future. The strategies are customer-focused innovation, systemic continuous improvement, advanced talent management, global engagement, extended enterprise management and sustainable products and processes. The study included a 61-question web-based survey that asked manufacturers to rank their progress in these areas.

“The results are a wakeup call,” says Michael Klonsinski, ASMC board chair and executive director of the Wisconsin MEP. “The consequences of inaction could trigger even more job losses in manufacturing and ultimately a lower standard of living for all Americans.”

Among the key findings:

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Manufacturing's Quest for Value

“The solution is not to shift away from manufacturing, but to transform our manufacturing base into a faster, more flexible industry capable of capturing global market share,” says Klonsinski. Right on, brother!

To do this will require US manufacturers to better understand how value is created and delivered. Too many manufacturers, especially smaller manufacturers, are so product oriented that they do not and can not understand the markets they serve and those that they want to serve. They have invested heavily in Lean and Six Sigma believing that the path to superior performance follows lower costs and fewer defects. That is only part of the equation. The rest of the equation has to do with the ability to grow market share in targeted product/markets by providing superior value and carry these revenues to the bottom line.

Underlying the conventional wisdom in many manufacturing operations is that value at the point of production translates directly into value at the point of consumption. This is patently false. Value and quality have no meaning when disassociated from markets. Absent the market focus they are empty words incapable of driving anything but poor to mediocre market performance. Manufacturers must wake up to the importance of markets and the dynamics that drive them. Unfortunately, there is nothing inherent within current Lean or Six Sigma thinking that can make the leap (and it's a big one) from the manufacturing floor to the market place.

Fortunately, Six Sigma is evolving into Six Sigma Marketing, often called Six Sigma Gen III that provides a fact based disciplined approach to growing market share in targeted product/markets by providing superior value. Check out the section on Six Sigma Marketing on www.marketvaluesolutions.com.