When Tech Bandages Stop Working

Many manufacturers have spent the economic downturn nurturing their existing infrastructure, trying to adequately maintain aging business systems and machinery until they see signs that a recovery for their markets and by their customers is clearly underway. But a Next Generation Manufacturing (NGM) Study sought to find out at what point equipment becomes so unreliable that it is a deterrent to successful business and future growth.

NGM found that 58% of manufacturers it studied had invested 5% or less of annual sales (three-year average) in capital equipment; 10% invest less than 1%. Furthermore, 50% of manufacturers considered at or near world-class in process improvement invest more than 5% of sales in capital equipment compared to 35% of manufacturers furthest from world-class status.

While equipment bargains are available, the credit needed to purchase machinery is still exceptionally tight, NGM concludes.

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