2019 Manufacturing Survey Top Priorities and Hurdles

What are your company’s top priorities for 2019? If you said improving profitability, growing sales and addressing the workforce shortage, you are in good company.

We’ve highlighted below the top priorities and hurdles for manufacturers per the recent 2019 National Manufacturing Outlook and Insights report published by SVA Certified Public Accounts:

Top 3 Priorities of manufacturers surveyed said:

  1. 81% expected their revenue to grow in 2019! 50% of the responders said they expected the growth to come organically from domestic markets.
  2. 54% identified improving profitability as key opportunity, with 31% expecting to INCREASE spending on marketing and advertising initiatives and on technology.
  3. 43% named addressing workforce shortage as a key focus with 62% expecting hiring to INCREASE at their company and 59% will increase spending for employee wages.

So what are the top hurdles to capitalizing on the revenue growth in 2019?

Surveyed companies responded with the following:

  1. Raw materials costs saw a significant increase with recent changes to tariffs. Increasing profitability can make up for the added materials cost.
  2. Labor costs are also increasing due to inflationary factors across the U.S. In order to reach full potential, manufacturers need to improve financial performance to help offset the expense — positively impacting the bottom line.
  3. Lack of available talent with hiring on the rise leads to the increase in labor costs. Companies are needed to focus on retaining current talent by increasing employee engagement and investing in their teams.
  4. Competition is increasing due to steady growth for U.S. manufacturers. This is seen as the second greatest risk to growth in 2019. However, competition breeds innovation — a driver to success in today’s economy.

While 2019 looks to be a strong growth year for U.S. Manufacturers, there will still be the need to maximize profitability, retain strong performers and operate as efficiently as possible to seize the opportunities.

Your APICS Milwaukee Chapter is a non-profit association with a mission to serve Supply Chain professionals and their companies in the Milwaukee area. The APICS body of knowledge and certification courses have been proven to help companies reduce costs, improve ROI and invests in employees. We can deliver the training at your location or frequently host educational programs at the APICS Milwaukee offices in Milwaukee.

We also provide opportunities to learn from each other such as our upcoming breakfast and tour at Thermo Fisher on March 28th titled Back to Fundamentals: Detailed Planning and Scheduling. Thermo Fisher leaders will be sharing how APICS certification has made them more efficient. The tour will be limited to 20 people, so you’ll want to register early!

We look forward to helping you and your company in 2019. For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected]

Value of Speaking the Same Supply Chain Language

Does it seem like departments in your organization speak different languages at times when it comes to supply chain management? Are there conflicts across departments with seemingly different goals?

Photo source: Image by rawpixel on Pixabay

The APICS body of knowledge, developed by supply chain experts, has been repeatedly proven to help companies speak the same language when it comes to supply chain. The value to the company is shown not only in improved communications but also reduced costs and increased ROI.

The Weir Group PLC is a recent example of a company benefitting from APICS education that helped them realize a reduction in lead times, increased orders and market share. In the APICS Magazine article, titled APICS Education Advances People and Performance at Weir, Elizabeth Rennie shared their story summarized below.

Weir is a global engineering and equipment manufacturing company in Scotland. Their operating model is decentralized into local and regional businesses and each business is responsible for its own profit or loss.

A few years ago, they launched a value chain excellence program to improve overall performance. As part of the initiative, an internal assessment of supply chain capabilities was performed. The assessment identified that there were varying degrees of capabilities and practices across the organization, with certain businesses requiring the establishment of fundamental supply chain and operations practices.

In addition, Weir lacked a common language of terms or practices. They engaged the APICS Houston chapter to provide broader views and the APICS full body of knowledge in supply chain management. By having a common knowledge base and improved people capability, Weir was able to significantly improve overall company performance. In fact, the results were so impressive that APICS Award of Excellence judges recognized Weir with the 2018 Education Award.

At the end of the CPIM courses, all participants shared their successes with their peers and management team. Three themes arose during the training including:

  1. Benefits of using all levels of manufacturing planning and control;
  2. Benefits of applying appropriate manufacturing, supply and inventory processes to each manufacturing environment;
  3. Common understanding of terms and best practices

The company results were impressive including the following:

  • One business achieved a 45 percent reduction in lead time, and another reduced inventory by 20 percent.
  • At the end of 2017, Weir’s Oil and Gas division realized a 67 percent increase in orders over the previous year.
  • The Minerals division saw an 11 percent increase in orders.
  • As a result of enhanced sales and operations planning processes, Weir has been able to deliver to additional demand and gain market share.
  • The Salt Lake City business, which previously had on-time delivery in the single digits, is now delivering on time 98 percent of orders.

 

Per their CFO, John Heasley, “People and their development is a strategic pillar for Weir. Through APICS education, Weir has been able to increase the capability of our people and organization. This increase is allowing Weir to make changes in how businesses operate, manage their supply chains and manage inventory. Weir will continue to support APICS education because it provides our employees with a broad body of knowledge, which can be applied to their particular business situation. In turn, improvements at the local business level will improve the overall performance of the Weir Group.”

Your APICS Milwaukee Chapter is a non-profit association with a mission to serve Supply Chain professionals and their companies in the Milwaukee area. Our certification courses help companies share a common supply chain management language that helps to reduce costs, improve ROI and invests in employees. We can deliver the training at your location or frequently host educational programs at the APICS Milwaukee offices in Milwaukee.

We also provide opportunities to learn from each other such as our upcoming breakfast and tour at Thermo Fisher on March 28th titled Back to Fundamentals: Detailed Planning and Scheduling. Thermo Fisher leaders will be sharing how APICS certification has made them more efficient. The tour will be limited to 20 people, so you’ll want to register early!

For additional information, contact your local APICS Milwaukee Chapter via our website at: http://apicsmilw.org.

Foxconn Exec Reinforces Commitment to Wisconsin at APICS Milwaukee Event

Is your business a potential supplier for Foxconn? Are you looking for ways to keep up with the latest trends in supply chain management?

Last week, Dr. Mitchell, chief executive officer of Foxconn subsidiary Aguila, attended our monthly professional development meeting to share an update on the Foxconn developments in Wisconsin. During the discussion, Dr. Mitchell reinforced that his company remains very committed to our state, despite some changes to original plans. He reminded the group that what Foxconn is planning has never been done anywhere in terms of the speed, scale, and scope so they don’t have a model to follow.

Dr. Mitchell was also a keynote speaker later in the week for the Manufacturing Matters! Conference ran by the WMEP. During his presentation, he reinforced the message that we are in an era of rapidly advancing technology and manufacturers will increasingly need to be flexible and collaborative to be successful.

Similar to the supplier readiness workshops this past Fall, Dr. Mitchell reiterated that they are not building a supply chain but rather, “curating an ecosystem.” He shared the steps below that Wisconsin companies should do now to prepare to be a part of the Foxconn ecosystem.

  1. Have a plan to make sure your business is ready to compete and able to scale up quickly by maximizing efficiencies, improving supply chain management, ensuring worker productivity, addressing skill gaps and embracing new technologies such as 3-D printing.
  2. Have a system to capture customer-derived loyalty and quality data scores as these will be key considerations in Foxconn’s supplier readiness scorecard.
  3. Visit the Wisconsin Supply Chain Workplace website and register your business. By creating a supplier profile, you will receive timely communication when Foxconn and other companies are posting RFPs to source suppliers for specific projects.
  4. Reach out now to Pendio Group, the third party company who is managing their vendor list. Todd McLees at Pendio Group is the contact available to assist companies to qualify as Foxconn suppliers.

Your APICS Milwaukee Chapter is a non-profit association with a mission to serve Supply Chain professionals in the Milwaukee area.  We help companies improve their supply chain management efforts through education and networking opportunities.

APICS Members receive discounts on training and we offer additional discounts for larger onsite training groups.  We look forward to hearing from you and working together to help find and retain skilled workers.  For additional information, contact your local APICS Milwaukee Chapter via our website at: http://apicsmilw.org.

Offering Flexible Employment to Manufacturing Employees

Photo source: Image by Yerson Retamal from Pixabay

Is your company struggling to find and keep skilled employees? Does your company offer flexible working arrangements for all employees? Despite the need for many manufacturing roles to be hands-on, companies can and should offer flexible working options to attract and retain top talent.  

With unemployment in Wisconsin remaining low around 3%, per the Bureau of Labor Statistics, employers are struggling to find skilled workers.  The challenge will likely remain for some time as per Engineering.com, “Projections from Deloitte and the Manufacturing Institute, among other industry analysts, predict that over the next decade, more than 2 million manufacturing jobs will go unfilled across the U.S.

A big reason for the growing skill gap is due to older workers retiring. To combat this trend, companies will likely need to adjust their workforce management strategies to attract younger generations. Offering better work-life balance and agile, flexible options will appeal greatly to employees who appreciate working on their own terms and often have other flexible career options available. 

A few months ago, Manufacturing.net shared an article on the importance of offering flexible work options in manufacturing. They shared,

“According to the 2018 Mercer Talent Trends Study, 51 percent of manufacturing employees want their company to offer more flexible work options. Yet only nine percent of HR leaders in the industry say flexible working is visibly present in their organization. 

Workers increasingly cite flexibility as one of the top things they look for in a job. As a result, remote work has become more common in many workplaces, but this isn’t as easy for manufacturing companies to offer. For many roles, employees simply need to be on the factory floor to get the job done.”

In addition to attracting new talent, research has found that flexible work arrangements can improve employee engagement and effectiveness, which means increasing employee retention in a tight job market.  

So how can manufacturers offer more flexibility? For many allowing employees to work remotely is not an easy option, but there are other ways offered by Manufacturing.net including:

  1. Offer Flexible Hours: Allow your employees to choose their shift hours. Employees—especially those with young children who may need to do the school run—will see something as simple as choosing whether to come in at 7 a.m. or 8 a.m. as a way to significantly improve their working lives.
  2. Shift Swapping: Common at retail companies and in restaurants can work well in the manufacturing setting. This flexible perk is exactly what it sounds like: employees are allowed to swap shifts with managerial approval. Some companies also allow employees to swap split shifts, switching just four hours out of an eight-hour shift.
  3. Compressed or Short Work Weeks: Employees work longer days in order to work fewer days. Compressed schedules are common among firefighters and nurses, who often work three 12-hour days and then have four days off. Other common compressed schedules include working 9-hour work days and taking every second Friday off; and working 10-hour work days and taking every Friday off.
  4. Be Flexible With Time Off: When it comes to offering your staff greater flexibility, it’s just as important to take into consideration the time your employees don’t spend at work. Create a Paid Time Off Policy that lumps together vacation days, sick time, and personal time into a single bank of days which employees can use to take paid time off work.
  5. Offer Floating Holidays: Where employees choose the days they take for vacation — subject to their manager’s approval and business needs, of course.
  6. Offer Part-Time Work and Job Sharing: Offering part-time positions, both on the floor and in the office, can make your company a more appealing place to work, helping you to attract and retain key team members. Employees at all levels — from entry-level manufacturing positions to senior-level managers — may be interested in part-time work if it’s available to them. For positions that require a full-time presence, job sharing allows two people to share a position, performing one job. One person might work from Monday to Wednesday and the other from Wednesday to Friday, with a handoff on the overlapping days.

Your APICS Milwaukee Chapter, the premier professional association for supply chain management, has a mission to serve Supply Chain professionals in the Milwaukee area. Starting in 1972, we help individuals and companies close their skill gaps through networking and educational opportunities. APICS Members receive discounts on training and we offer additional discounts for larger onsite training groups. We look forward to hearing from you and working together to help find and retain skilled workers.  For additional information, contact your local APICS Milwaukee Chapter via our website at: http://apicsmilw.org.

APICS Milwaukee Hosts Dr. Bill Mitchell, VP Business Operations Americas, Foxconn

Are you interested in hearing from Foxconn VP Business Operations Americas about their developments in Wisconsin? Is your business a potential supplier for Foxconn?

Per BizJournal last week, Foxconn’s statement said the company continues “to make good progress on all fronts related to the Wisconn Valley Science and Technology Park (in Mount Pleasant), while simultaneously broadening our investment across Wisconsin far beyond our original plans to ensure the company, our workforce, the local community, and the state of Wisconsin will be positioned for long-term success.”

APICS Milwaukee has been providing periodic updates on Foxconn progress. If your business is a potential supplier to Foxconn, last Fall we shared the following three ways to prepare based on input from the Foxconn Supplier Readiness workshop hosted by the Wisconsin Economic Development Corporation.

  1. Have a plan to make sure your business is ready to compete and able to scale up quickly by maximizing efficiencies, improving supply chain management, ensuring worker productivity, addressing skill gaps and embracing new technologies such as 3-D printing.
  2. Have a system to capture customer-derived loyalty and quality data scores as these will be key considerations in Foxconn’s supplier readiness scorecard.
  3. Visit the Wisconsin Supply Chain Workplace website and register your business. By creating a supplier profile, you will receive timely communication when Foxconn and other companies are posting RFPs to source suppliers for specific projects.

Your local APICS Milwaukee Chapter, the premier association for supply chain professionals, is proudly hosting Dr. Bill Mitchell, VP Business Operations Americas, Foxconn on February 18 at MATC in Oak Creek to provide an update on the Foxconn development. We hope members and guests can join us for dinner, drinks and the opportunity to learn more about this important topic for our state.

APICS Milwaukee is a non-profit association focused on helping our members and the community stay informed about local happenings that could impact supply chain efforts.  We also offer several educational programs and have three certification training courses below starting in early March.

 

For additional information, contact your local APICS Milwaukee Chapter via our website at: http://apicsmilw.org.

1 https://www.bizjournals.com/milwaukee/news/2019/02/07/foxconn-disputes-bloomberg-businessweek-article-on.html