Understanding Manufacturer’s Challenges in 2019

Saturday, January 19, 2019

Over the last few months, the Manufacturing Extension Partnership (MEP) Program has been commemorating its 30th anniversary. The Program has enjoyed taking a step back to look at the beginnings, the reasons the Program came to be, and how MEP can continue to deliver on its mission to strengthen and empower U.S. manufacturers well into the future. But during MEP's 30th anniversary, another milestone was reached, as this fiscal year marks the 10th year clients were asked about the challenges they are facing as part of the NIST MEP Client Survey. This important activity is one that helps determine how MEP can navigate the future.

Over the last 10 years, the data gathered from the client challenges question has helped the MEP National NetworkTM get a peek at what is on the minds of CEOs. Understanding the business and economic factors that influence companies helps the Network remain flexible in responding to the problems clients are facing.

 

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Credit: iStock/Natali_Mis

 

The prioritization of challenges has changed as the economic environment and the manufacturing landscape has changed. Some of the challenges have been consistent (such as continuous improvement and product development), while others have become increasingly important over time. The most significant changes to client responses focus on the issue of employee recruitment and retention. Over the past 10 years, the share of MEP clients reporting this as a challenge has nearly tripled and is now the second most frequently reported challenge companies are facing. Some other interesting shifts have also occurred including:

    • Ongoing continuous improvement and cost reduction issues remain the most frequently cited challenge by MEP clients after 10 years, although the percentage of respondents reporting this challenge has dipped from 71.9% to 67.2%.
    • Identifying growth opportunities was reported by less than half the companies in FY2018, which represents a drop of about 12 percentage points compared to FY2009. Helping companies grow is the third most common challenge cited in FY2018.
    • Technology needs and managing partners and suppliers are two challenges that are now more frequently cited in FY2018 compared to FY2009. While both challenges are being reported by about 16% of clients, the change from FY2009 is significant. These shifts reflect the changing market conditions and competitive environment.
    • In addition, innovation/product development has remained a consistent challenge for MEP clients. The share of clients citing innovation/product development declined by 4 percentage points between FY2009 and FY2018. About 41% of companies reported the challenge in FY2018, while 45% reported the challenge in FY2009.
    • Financing and sustainability both fell as important challenges over time. They fell by more than 6 percentage points between FY2009 and FY2018. The financing shift may reflect the improving economic conditions nationally coming out of the recession, which would mean easier access to capital and financing.
    • Exporting remains the least cited challenge and was reported by only 6% of respondents in FY2018 versus 8% of respondents in FY2009.

NIST MEP has a unique position in the Federal Government that allows for collection and feedbackanalysis directly from clients served by the MEP National Network. This provides the Program with a wealth of information that helps guide its approaches to serving the U.S. manufacturing industry, both now and in the future. So, as we enter the new year, it is important to take a step back and look at what MEP Center clients are telling us. Being responsive to the needs of U.S. manufacturers and helping mitigate their challenges is one of the reasons the Program is around. Integrating this client feedback so that MEP Centers may help their clients proactively prepare for future challenges is important.

 

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NOTE: The challenges question is limited by not being customized to fit different manufacturing subsectors and having pre-selected answer choices, and that it is just a piece of the larger puzzle of manufacturer needs, so to speak. However, the more that puzzle can be completed, the better MEP will all be able to strengthen and empower U.S. manufacturers.


The MEP National Network is a unique public-private partnership that helps small and medium-sized manufacturers generate business results and thrive in today’s technology-driven economy. The MEP National Network comprises the National Institute of Standards and Technology’s Manufacturing Extension Partnership (NIST MEP), the 51 MEP Centers located in all 50 states and Puerto Rico.

Data and Trends and MEP National Network

 



nico-thomas
ABOUT THE AUTHOR
Nico Thomas

Nico Thomas is a Performance Analyst at NIST MEP, working with the Program Evaluation and Economic Research group to help provide tools and information to maximize U.S. manufacturing competitiveness

 


xTuple Works with NIST Manufacturing Extension Partnerships (MEP)

xTuple is proud to partner with MEP’s across the U.S. as we further our mission to help small manufacturers (as well as distributors and the rest of the supply chain) grow their business.

For example, we were platinum sponsors of the North Carolina MEP’s MfgCON 2018 in November, an annual meeting of several hundred manufacturers from across the state, an event designed to share best practices, practical advice and tips to create a safer, more efficient and more profitable sector.