WMEP Survey Takes Pulse of Wisconsin Manufacturers; A third of manufacturers surveyed report profitable growth, but more than half see room for improv
DATELINE: MADISON, Wis.
A survey conducted by the Wisconsin Manufacturing Extension Partnership (WMEP) offers a timely snapshot of the health and growth prospects of the state's manufacturers.
Although one third of the manufacturers surveyed gave themselves high marks for growing sales and profitable growth, more than half indicated room for improvement on a wide range of performance benchmarks. WMEP is a nonprofit consulting organization that helps small and mid-size manufacturers become more competitive.
WMEP conducted the survey of 173 Wisconsin manufacturers in October to assess the need for services to help manufacturers implement business growth strategies. Survey responses were based on a 1-7 scale in which manufacturers ranked themselves on performance and external market issues.
Performance Highlights:
Manufacturers ranked themselves high (6, 7) on the following:
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36% report growing sales
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33% report profitable growth
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25% give their firms high marks for competitiveness
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24% are operating at/near maximum capacity
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30% characterize their products as "value added" vs. commodity products
Manufacturers ranked themselves low (1, 2) on the following:
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10% report declining sales
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8% report unprofitable growth
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6% give their firms low marks for competitiveness
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21% have excess capacity
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14% are in survival mode
More than half of the manufacturers surveyed gave themselves middle-of-the-road rankings (3, 4 and 5) on questions regarding competitiveness (68%), profitable growth (58%) and sales growth (52%).
External Market Issues:
Manufacturers were asked to rank external market issues having a major (6,7) impact on their businesses: Among the findings:
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67% cited rising raw materials costs
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49% cited extreme pricing pressures
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45% cited increasing demands from customers
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27% cited offshore competition
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22% cited increasing domestic competition
In addition, an almost identical number of firms- 26% -ranked offshore competition as having little or no impact. Seventeen percent ranked domestic competition as having little or no impact.
Growth Tactics:
Wisconsin manufacturers were also asked about tactics they plan to implement to promote growth. Among the findings:
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95% plan to build business with existing customers
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69% plan to enter new markets
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67% plan to develop new products
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49% plan to develop new technologies
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21% plan to acquire another business
"We know that the global economy continues to require manufacturers to transform their business operations on a number of fronts," said Michael Klonsinski, executive director for WMEP. "There's a lot of good news in this survey, but there's also a strong indication we can do better."
Klonsinski said the need for strategic business growth services mirrors the need for lean strategies in the mid-90s. "Lean is essential, but top-line growth and market diversification are becoming equally important contributors to manufacturing success today," he said. "Clearly the survey underscores the need for services to help Wisconsin's small and mid-size manufacturers adopt innovative growth strategies," Klonsinski said.
Forty-four percent of the manufacturers surveyed say they lack the internal resources to implement growth strategies such as new product development, market expansion and sales growth. Many of these were smaller companies with less than 100 employees and less than $11 million in annual sales.
Though WMEP is best known for lean manufacturing expertise, in the past year it has significantly ramped up its services to help manufacturers develop and implement growth strategies. This builds on the findings of the 2005 Wisconsin Manufacturing Study, which revealed that Wisconsin's $46 billion industrial sector is well-positioned for future growth as long as manufacturers adopt business practices that emphasize speed, agility and make the transition from "commodity" to "value-added" products.
WMEP provides technical expertise and business assistance to help small and mid-size manufacturers adopt advanced manufacturing technologies and business practices. WMEP is a leader in lean manufacturing, strategic business development, quality systems and supplier development. Last year WMEP-assisted manufacturers reported a $233 million economic impact with 2,696 jobs created/retained. For more information, visit www.wmep.org or call 1-877-856-8588.
CONTACT: Wisconsin Manufacturing Extension Partnership
Linda Abbott, 608-826-6215
abbott@chorus.net