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Challenging Times...

Posted by Carrie Pittman on Jan 18, 2013 10:28:00 AM

This article, originally posted on NIST MEP's Manufacturing Innovation Blog and written by Ken Voytek, discusses the most important challenges facing MEP Clients for the next 3 years.

As part of the MEP client survey process, MEP clients are asked to identify the top 3 challenges their companies face over the next three years. We’ve been asking this question for 4 years and over 27,000 clients have responded over that period. The answers paint an interesting picture of what keeps manufacturers up at night. Manufacturers cite a host of challenges and those challenges have changed in interesting ways over the past four years.

Most Important Challenges facing MEP

Nearly 73 percent of clients cited continuous improvement as a challenge in FY 2012. While continuous improvement is cited as the top challenge over the last four years and the number citing it has been remarkably consistent, there are some interesting shifts among the other categories. For instance, if we look more closely at the data for the most recent year, we found that nearly 78 percent of the clients cite either product development/innovation or growth opportunities as a challenge and that would make it the most frequently cited challenge overall.

 

  • Nearly 73 percent of clients cited continuous improvement as a challenge in FY 2012, which ranks it as the top challenge. This data has remained very consistent.
  • Taken separately the challenge of product development and innovation and the challenge of growth rank second and third. Yet they are similar enough whereas they could be combined. Roughly 78 percent of clients cited one or the other, which would rank it as the top challenge if taken together.
  • Over time, there has been a rather significant increase in the portion of clients saying that workforce needs is an important challenge. In FY 2012, over 33 percent of clients cited employee recruitment and retention as an important challenge compared to 20 percent in FY 2009.
  • In addition, technology needs, supply chain needs, and product development/innovation are more important than they were four years ago. Nearly 49 percent of clients cited product development and innovation as an important challenge facing their company, up from 45 percent four years ago. The share of clients citing technology needs as a challenge jumped by 2 percentage points – rising from roughly 10 percent in 2009 to 12 percent in 2012.
  • Conversely, smaller shares of clients are now reporting that growth, sustainability, and financing are important challenges. For instance, the share of clients identifying financing as a challenge fell from 18 percent in 2009 to roughly 13 percent in 2012. Again, that may reflect an increase in credit availability and firms feeling better about their balance sheets.
  • It is harder to explain the decrease in growth while product development and innovation is on the uptick. It is likely that these changes reflect underlying changes in the economic environment and changes within client companies as they respond to new market opportunities and growth opportunities. However, we will be looking further into recent and future data to better understand this data trend.

We are in the process of examining changes to the list of challenges we provide clients as part of the MEP survey process. Please let us know of any thoughts that you have.

Topics: Manufacturing

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