When Tech Bandages Stop Working

Oct. 19, 2010
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.