Study Reveals Obstacles for Manufacturers

Aug. 1, 2007
According to a study released by Capgemini (New York), less than two in five (39.9 percent) U.S. manufacturing executives are very confident they can

According to a study released by Capgemini (New York), less than two in five (39.9 percent) U.S. manufacturing executives are “very confident” they can increase revenue enough to maintain or improve their position in the global marketplace over the next three years with their current resources.

Major growth obstacles include rising costs, increased competition, escalating customer demands and shortage of skilled workers. Two thirds (67.8 percent) of U.S. manufacturing executives say the biggest challenges to customer attraction and retention are increased demands imposed by customers and global competition.

The report also revealed that, on average, less than 20 percent of the 273 respondents consider their companies to be “world class” in the revenue-generating areas of product innovation (18 percent), operational excellence (14 percent), and customer retention (21 percent).

As a result, manufacturers are considering several new initiatives to spur growth. Some of those include: continuous improvement practices outside of production, increasing training, making larger investments in capital assets, outsourcing functions, hiring more people and seeking mergers or acquisitions.

Executives also say they support buying new machinery (53.4 percent), improving processes (45.8 percent), creating new products (30 percent), improving product innovation (24.5 percent) and building new plants (20.9 percent).

“As our study shows, two-thirds, or 67 percent, of the most-often cited strategies for improving performance and growth relate to people management,” says Gary Baldwin, vice president and North American manufacturing industry leader for Capgemini.

The study, “Leading Through Growth,” was conducted in May 2007 by IndustryWeek Custom Research and included respondents holding the job titles of CEO, COO, president, CIO, CFO and CMO.