Recipes Matter But So Does Execution

A recent survey by the Manufacturing Performance Institute in association with the American Small Manufacturers Coalition, the Association for Manufacturing Excellence, and several Manufacturing Extension Partnership Centers across the United States sought to identify the specific manufacturing practices and the progress that manufacturers have made in achieving world-class status.  Nearly 400 manufacturers participated in the 2013 Next Generation Manufacturing (NGM) survey. This is the third time the survey (earlier surveys were in 2009 and 2011) has been done and represents an opportunity to peer into the manufacturing sector from a different perspective. In addition, the study also points to the multiple fronts that manufacturers must work on to improve their companies and also suggests that underlying their progress on these dimensions requires leadership, skills, investments, and a strategy going forward.

The survey sought to understand the importance and progress that manufacturers have made in six strategic areas: customer-focused innovation; human capital acquisition, development, and retention; process improvement; supply chain management; sustainability; and, global engagement.  The report suggests that while many manufacturers recognize the importance of these six elements to their future growth and profitability; many have yet to achieve world-class status in these areas and many manufacturers have fallen behind in their progress between 2009 and 2013. Thus, while companies understand that they need a recipe for success, being able to execute (or implement) the recipe is equally important.

As the charts below highlight, the story is mixed.  While there has been an increased recognition of the importance of sustainability (+20 percentage points), human capital (+7 percentage points), process improvement and supply chain management (+4 percentage points), and global engagement (+3 percentage points), surprisingly customer focused innovation fell by 2 percentage points which seems odd.

And progress in meeting world-class standards in these strategy areas, improvements occurred only for sustainability (+9 percentage points) and supply chain management (+4 percentage points). Most distressing is that progress against world-class standards across the remaining areas has seemingly stalled out. Given that the study finds large differences in the importance of and progress towards world-class assigned to these six strategies between large and small manufacturers, the path forward may be different for each and the challenges more significant.

Reading these results suggests a journey that many companies may need to embark on that requires different recipes for success and many ingredients. The recipe will vary but seeing how the ingredients are combined is important. The report does not prescribe a specific or best path but rather starting where a company is in terms of these areas and practices. Companies need to recognize the importance of these factors to their future success and how they are interrelated and inextricably linked. MEP centers need to recognize that they must help companies on multiple fronts – single solutions are often not addressing the key issues faced by companies.  Otherwise, companies will continue to push the rock up a hill to only see it roll back down the hill.