Manufacturing Report 2015: Overcoming the Five Barriers to Business Growth

July 2015

2015Manufacturing Report Overcoming the Five Barriers to Business Growth

Manufacturing Report. Copyright 2015, Sikich LLP. 2

Table of Contents

ù Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ù Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ù About the Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ù Key Finding #1: Growing in Existing Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ù Key Finding #2: Hiring Qualified Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ù Key Finding #3: Reducing Operational Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ù Key Finding #4: Effectively Managing the Supply Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ù Key Finding #5: Technology Remains a Significant Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ù The Bottom Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ù Survey Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

2015 Manufacturing Report Overcoming the Five Barriers to Business Growth

Manufacturing Report. Copyright 2015, Sikich LLP. 3Manufacturing Report. Copyright 2015, Sikich LLP. 3

AbstractIn effort to understand the issues facing the manufacturing and distribution industry, Sikich conducted a survey in March 2015 to determine manufacturers’ top concerns and predictions for the near future. The survey touched on some of the most critical issues, such as expectations for the industry, the U.S. economy, overall performance and challenges. The end goal was to analyze emerging trends in a rapidly changing industry. After reviewing the survey results, we concluded five key findings:

ù Manufacturers feel a need to grow in existing markets,

ù Hiring qualified workers is critical,

ù Reducing operational costs will be crucial for success,

ù Effective supply chain management is of extreme importance and

ù Technology remains a significant challenge.

In the long term, these five findings will prove to play a major role in the evolution of the manufacturing industry. This report addresses the reasons behind this hypothesis and explores case studies that illustrate the findings.

IntroductionAn industry once isolated from technology is now experiencing fast-paced shifts, from advancements in 3D printing to the emergence of the Internet of Things (IoT). In fact, the next big trend looking to make waves in the manufacturing industry is the blending of analog and digital worlds with the incorporation of augmented reality via holography. Take a moment to imagine what becomes possible when a designer in California is collaborating with both a manufacturer in Ohio and a supplier in China on the exact virtual object in real time. Or taking the premise a step further, imagine a systems engineer pulling real-time data over the IoT from a piece of equipment that is reporting a malfunction, then visually directing an on-site field technician wearing a virtual reality device how to fix that problem over a Skype link. The definition of collaboration will soon take on a whole new meaning.

About the SurveyIn March 2015, Sikich conducted a survey to learn more about issues facing the manufacturing and distribution industry. The survey covered critical concerns such as expectations for the industry, the U.S. economy, overall performance and challenges, and our goal was to analyze the trends emerging in a rapidly changing industry. Of the survey respondents, almost 75 percent have annual revenue ranging from $1 million to $100 million, with nearly 25 percent taking in more than $100 million. While only 16 percent have an employee headcount of 251 to 500, 40 percent have between two-to-four locations worldwide with 82 percent headquartered in the Midwest and 44 percent with international operations. About half of the manufacturers declared they are more optimistic about the U.S. economy compared to last year. In fact, 54 percent expect their revenue to increase by more than 5 percent in 2015, and more than 90 percent expect the industry to expand or stay the same over the next year.


While expectations are high for the next year, the manufacturing industry is still overcoming barriers in order to meet those goals. After reviewing our survey results, we discovered five key findings that will prove to play a major role in the manufacturing industry:

ù Manufacturers feel a need to grow in existing markets,

ù Hiring qualified workers is critical,

ù Reducing operational costs will be crucial for success,

ù Effective supply chain management is of extreme importance and

ù Technology remains a significant challenge.

Key Finding #1: Growing in Existing MarketsWhen companies target growth in existing markets, there is often reduced risk. Business leaders understand market size, as well as their target audience and how that audience reacts to the product. Regardless if the product is marketed in a new way, at the end of the day, the target customer is already aware of the product and is oftentimes purchasing it. While there is a need for manufacturers to develop new products and services within new markets, an increase in existing markets may be more efficient for manufacturers today. In fact, as shown in Figure 1, 37 percent of manufacturers surveyed believe an increase in existing markets is their main opportunity for growth, whereas 22 percent believe their main opportunity for growth lies in new product and service development.

Manufacturers often stick to existing markets to avoid risk, though no matter how predictable existing markets may be, they are still deep-rooted with competition. If a competitor has a higher-quality product,

substantial capital and customer loyalty, it can be difficult to establish a secure footing in the market. When remaining in an existing market, manufacturers need to create products that are exceptionally better than currently existing products to truly attain marketplace leadership and experience high profitability.

The practice of avoiding new markets may be holding many manufacturers back. As shown in Figure 2, 32 percent of survey respondents spend fewer than 1 percent of sales on new product research and development. That is a staggeringly low percentage for an industry that is evolving on a daily basis. In order to survive and remain competitive, manufacturers will need to progress with the trends or they will be left behind. One advantage of pursuing a new market is it’s less likely to be entrenched with competitors, making it easier to obtain market leadership.

Figure 1: Main opportunity for business growth in the next 12 to 18 months

Increased share inexisting markets

New product orservice development

37%37%

22%22%

Figure 2: Sales invested in new product research and development (R&D)

Less than 1%

51%51%

13%13%4%4%

32%32%

1% to 5%

6% to 10%

Greater than 10%


A big challenge for many manufacturers is embracing change in whatever shape or form it presents itself. When manufacturers can accept the changing environment that is their industry, they can better adapt their business outlook and practices for the future and increase revenue. In fact, the majority of survey respondents expect to increase their revenue this year by more than 5 percent as shown in Figure 3.

Often, business leaders get so comfortable with their current strategy that they fail to see opportunities, let alone leverage what is in front of them. Both existing and new markets come with their fair share of risks, from too many competitors dominating an existing market to the fear of a new market never really emerging at the pace and size required for success. Regardless of the reason, manufacturers will need to determine how to sell existing products to new markets and new products to existing customers.

Key Finding #2: Hiring Qualified Workers Manufacturing looks much different than it did just five years ago. Innovative technologies have broken down barriers and thrust a once dark-aged industry into the 21st century with advanced robotics, 3D printing and the IoT. Today, manufacturers are using technologies to drive innovation and renewal into the industry, and many are investing heavily in high-tech equipment, which in turn requires a specific skill set to perform and operate. Ironically, while these advanced technologies bring opportunities, they also create a significant widening in the already-existing workforce skills gap. However, even though the industry continues facing the issue of how to strengthen the manufacturing workforce, 96 percent of our survey respondents expect hiring to increase or, at the very least, stay the same in 2015 (see Figure 4).

With a refreshingly positive outlook on hiring, overcoming a large skills gap will not likely happen overnight. One way manufacturers can mitigate the struggles the skills gap has produced is to proactively develop a workforce trained in science, technology, engineering and math (STEM). As the industry continues to rapidly evolve, the emphasis on a STEM-based workforce is needed now more than ever. The need to attract and retain an advanced STEM workforce became stronger when the Brookings Institution released its report, America’s Advanced Industries1. Within the report, Brookings identified 50 advanced industries, including 35 from the manufacturing sector, from aerospace, communication equipment and industrial machinery to motor vehicles, audio and video equipment and medical equipment. These advanced industries create a super-set of industries that have the potential to revive the U.S. economy. Creating a workforce with these specific STEM skill sets is now critical for manufacturers to remain competitive.

Figure 3: Revenue expectations for 2015 compared to 2014

Increase morethan 5%

Increase upto 5%

Stay the same

54%54%

29%29%

11%11%

Figure 4: Expectations for hiring in 2015

Decrease Increase Stay the same

55%55%

41%41%

4%4%

1 Andes, Scott; Fikri, Kenan; Kulkarni, Siddharth; Muro, Mark; Rothwell, Johnathan. (February 2015). America’s Advanced Industries: What They Are, Where They Are, and Why They Matter. Retrieved from http://www.brookings.edu/research/reports2/2015/02/03-advanced-industries#/M10420


While not every position in manufacturing requires STEM knowledge, a STEM job typically remains unfilled longer than a non-STEM job, such as assemblers and fabricators on the assembly line. Currently, there are significant job opportunities within the manufacturing industry. According to the Brookings report, a job posting for a STEM-related occupation remains open for an average of 43 days, compared to 32 days for a non-STEM job. Manufacturers have inadequately prepared workers that can be developed and trained to match those STEM skills. According to the National Association of Manufacturers2, there are more than 12 million Americans employed directly in manufacturing, and if the industry placed emphasis and value on teaching current employees the technical skills needed, it would not only fill the STEM positions, but also retain its employees by helping them succeed. As these sectors labeled as advanced industries prove to be a major role in closing the workforce skills gap and increasing educational requirements, manufacturers must acquire qualified workers quickly.

In order to do so, the industry must change the public’s perception of manufacturing, especially in the classroom. Today’s graduating generation lacks an interest in manufacturing due largely to an outdated perception of the industry and what the jobs entail. Many students do not know how the industry has evolved or the technical skills needed to obtain a career in modern manufacturing. Reintroducing today’s youth to the basic art of building products we use every day is critical to illustrate how manufacturing is no longer dark and dirty, but instead sleek and high-tech with 3D visualization tools, robotics and emerging technology, like the IoT and Microsoft’s latest invention, HoloLens. Manufacturers need to connect and build relationships with educational institutions from local universities to high schools, which can lead to opportunities for the students to accurately learn what the industry is really all about. This is a chance for manufacturers to reposition themselves within the community to show why manufacturing is a noteworthy career choice, the knowledge and skill sets required and how it can open the door to a high-paying and satisfying career with the ability to move from the shop floor to management.

Many educational institutions have failed to sufficiently emphasize the importance of STEM-based knowledge, and both manufacturing’s public and private sectors have failed to correct the dated image and improve strategies to develop and promote STEM education. Now, the U.S. government is finally putting a focus on manufacturing and STEM skill training to help the industry shrink the skills gap and remain competitive. The creation and funding of manufacturing innovation institutes by the Obama administration aim to drive a much-needed refocus on the industry and position America at the forefront of 21st century manufacturing. In addition, manufacturing universities will strengthen their programs, and each institute will bridge the gap between applied research and product development by bringing together companies and universities to develop cutting-edge technologies. According to the Brookings report, for every new job in an advanced industry sector, 2.2 jobs are created domestically. This means that in addition to the 12.3 million workers currently employed in the advanced industry sector, another 27.1 million U.S. workers owe their jobs to economic activity supported by these industries. To meet these figures, it’s imperative that the government initiative aligns with the public and private manufacturing initiative to better educate our workforce for the technically advanced skillset workers in the U.S. manufacturing industry will need to improve our worldwide competitive capabilities for the future.

2 Bureau of Labor Statistics (2014), with estimate of total employment supported by manufacturing calculated by NAM using data from the Bureau of Economic Analysis (2013, 2014). Retrieved from http://www.nam.org/Newsroom/Facts-About-Manufacturing/


Key Finding #3: Reducing Operational Costs Forecasting in today’s evolving manufacturing industry can be unpredictable at times. However, the last seven years–following the financial crisis–the U.S. manufacturing sector is showing signs of healthy growth to fuel a much-needed revival. While manufacturers are experiencing this growth, they aren’t without obstacles, such as cutting operational costs.

Manufacturing costs can typically be divided into three categories: raw materials, direct labor and overhead. Shortage of resources and long supply routes contribute to frequent price changes for many raw materials used by manufacturers. Steel prices, for example, can change by more than 30 percent from year-to-year. Crude oil and natural gas prices can also move more than 30 percent annually. Raw materials often account for the majority of the cost of finished products. Direct labor is another factor, as manufacturers need employees who can work the production line, and with the need for qualified workers, there will be an increase in hiring and wages. On top of raw materials and labor is the all-too-familiar struggle between the shop floor and the back office, particularly when it comes to overhead costs. Since there are so many indirect variables that increase or decrease the cost, monitoring overhead remains a challenge. While cutting operational costs is a must, an overwhelming majority of our survey respondents expect raw materials (Figure 5.1), taxation (Figure 5.2) and labor (Figure 5.3) costs to either remain the same or increase in 2015.

Many manufacturers also need to make large investments in production equipment and computer systems to improve efficiency and research and development for new products. Figure 6 provides a breakdown of the top capital expenditures planned for in 2015. As shown, 32 percent of manufacturers surveyed are planning capital expenditures for equipment this year. With operational costs expected to remain the same or increase this year and the need to cut costs across the board, how will manufacturers be able to invest in equipment capital expenditures?

Despite the need to cut costs when they are expected to remain high, many

manufacturers have brought production back to the U.S., making the proximity to the customer closer and allowing for quick turnaround and delivery. These continued improvements allow for brand consistency and provide faster response times and better products. While there are many issues contributing to cutting operational costs, manufacturers can leverage their supply chain relationships to increase production and delivery and better manage materials, labor and overhead.

Figure 5.1: Expectations for raw material costs in the next 12 months

Increase Remain the Same Decrease

47%47%

39%39%

11%11%

Figure 5.2: Expectations for taxation costs in the next 12 months


50%50%

44%44%

4%4%

Figure 5.3: Expectations for labor costs in the next 12 months


25%25%

68%68%

4%4%

Figure 6: Top capital expenditures planned in 2015

ComputerHardware

ComputerSoftware

ManufacturingEquipment

Plant ExpansionModernization

21%21%

12%12%

21%21%

32%32%


Key Finding #4: Effectively Managing the Supply ChainMaximizing supply chain management is critical now more than ever before. A highly efficient supply chain helps to streamline day-to-day processes and manage the flow of products and information. Today’s supply chain can even have tremendous impact on a manufacturer’s bottom line and can increase customer service by delivering the right product and quantity in a timely manner. It’s this impact that drives almost 60 percent of survey respondents to say supply chain management is important or highly important to their plants’ success in the next five years (see Figure 7).

As more manufacturers realize the importance of supply chain management, the competition will begin to grow, and building a more resilient supply chain will be critical. In 2013, Sikich client AcuSport, one of the leading distributors of outdoor sports in the nation, saw a significant growth in annual volume with order lines increasing 300 percent from 2012 to 2013. AcuSport’s primary

distribution center was a 96,000-square-foot warehouse, which could not sustain the rapid growth the company was experiencing from both a storage and throughput standpoint. Business leaders realized their existing Ohio warehouse, which processed 85 percent of orders, was too small and bottlenecked to handle the expected growth.

To accommodate the rapidly growing business, AcuSport partnered with Sikich’s supply chain team to engineer and manage an expansion to the warehouse, which included the addition of a new 96,000-square-foot building, an Automated Storage and Retrieval System (ASRS), a modularized picking and conveyor system and a new warehouse system. As a result of the new additions and configurations, AcuSport has greatly benefitted from the new space utilization and increase in productivity. By doubling in size and introducing an ASRS system with the carton and case pick modules, the company realized a 250 percent increase in storage capacity with pick and pack rates more than doubling.

Today’s emerging technology and machinery is forcing supply chains to stay competitive by reducing their response times and creating products faster. The deployment of new machinery and technologies can substantially reduce lead times; materials can be used more efficiently and scraps can be repurposed for additional projects; new designs get to the market faster; and logistics will give visibility to inventory. There’s value in taking a complex product once made on an assembly line and increasing production by developing the product in a more efficient manner, thus lowering prices and giving manufacturers a competitive edge. An effective supply chain creates unique opportunities, but a failed supply chain prevents a manufacturer from generating even more revenue. With today’s emerging trends, creating a solid supply chain management strategy is one of the most critical business decisions a manufacturer can make.

In addition, collaborating and creating a stronger relationship with inbound and outbound supply chain partners can allow manufacturers to achieve common goals and share risks and rewards. Furthermore, a focus on core competencies is important so manufacturers aren’t diverting attention and resources away from what the company does best. Investing in innovation for core competencies can ensure customers that the manufacturer is flexible and can adapt quickly.

Figure 7: The importance of supply chain management to achieve success over the next five years

NotImportant

MinorImportance

SomewhatImportant

Important HighlyImportant

7%7%

14%14%

20%20%

37%37%

22%22%


Key Finding #5: Technology Remains a Significant ChallengeNew advances in technology have made it easier for U.S. manufacturers to lower costs by investing in systems such as an enterprise resource planning (ERP) solution. When engaged with the appropriate ERP software, manufacturers can gain the intelligence to improve products and optimize performance such as inventory counts, production metrics, cost histories, labor reports, creation and monitoring of part numbers, accounting and business planning. However, not every manufacturer has invested in a technologically advanced ERP system. Provided in Figure 8, 53 percent of survey respondents admitted to still using spreadsheets and other manual processes to prepare their key performance indicators (KPIs). Accurate

KPIs are critical to drive current business and future success, and managing a manual process to monitor operational performance and drive strategic initiatives is problematic.

Sikich client Hagler Systems operates a 90,000-square-foot engineer-to-order machining and fabricating facility in Augusta, Georgia. As a small, but fast-growing company, Hagler has tried to embrace the growing pains that come with significant change and expansion. Four years ago, the company faced a complicated, time-consuming paper work process, and it even lacked inventory part numbers for thousands of parts. Hagler employees were literally working with and managing a paper-heavy process on million-dollar projects.

Realizing their manual paper system wasn’t going to work favorably during this time of expansion, Hagler leaders partnered with Sikich to implement an ERP system. Hagler employed the implementation of Microsoft Dynamics AX with Sikich and credits the ERP system for operational and process improvements, as well as the development of new, sophisticated products. No longer relying on tribal knowledge, Hagler can now use visual planning for the entire company, from management to the shop floor, providing a new level of transparency and accountability.

Many manufacturers are turning to technology to support business growth and the long-term strategies accompanying that growth. To illustrate, Sikich asked survey respondents to identify the top two business drivers impacting their technology strategies in the next year. Figure 9 shows 34 percent claimed their own growth expectations impact their technology strategies the most, compared to 24 percent with improving customer service and response time.

At the start of the implementation process, Hagler had no basic building blocks and had to start from scratch. When implementing an ERP system, it’s important to consider not only what is required for the business today, but what will benefit the company for the future as well. Since Hagler implemented Microsoft Dynamics AX, those on the shop floor can tackle more work, the sales force can expand the company’s customer base to a level that requires more detailed documentation and senior leaders can invest more in engineering and production.

Figure 8: System used to prepare key performance indicators (KPI)

53%53%

11%11%

26%26% Spreadsheets andManual Processes

Financial applicationmodule (ERP)

Custom built/Legacy application(i.e. in-house application)

Figure 9: Top two business drivers impacting technology strategies

34%34%

Our own growthexpectations

Improve customer service and response time

24%24%


As a manufacturer, making smarter purchasing decisions and forecasting is important to remain competitive in a fast-growing market. Twenty-one percent of survey respondents use technology to improve their manufacturing processes and only 12 percent state they use an ERP integration to improve their performance (see Figure 10).

Technology is transforming the manufacturing world, and the pace at which trends are emerging shows no signs of slowing down. From a manufacturer’s perspective, we are still only scratching the surface of possibilities. In fact, some industry observers see the current state of manufacturing as a new global industrial revolution. We have already seen scanning technologies that read bar-coded labels and transmit information to computing devices. Now imagine how much more efficient we will become when manufacturers can use a virtual reality device to show a 3D virtual representation of a warehouse, and guide workers to where they need to be and the most efficient way to reach that point from where they are now.

The Bottom LineThe demand for consumer goods continues to surge, making it more imperative for manufacturers to gain a competitive edge. The topics discussed in this report–growth in existing markets, the need for qualified workers, reducing operational costs, the importance of supply chain management and challenges with technology–may be barriers for manufacturers to overcome; however, once the hurdles are cleared, manufacturers will have the ability to further restore an industry that was once lost to overseas production. By becoming more productive, sustainable and flexible as an industry, U.S. manufacturers will be able to evolve with emerging trends and continue reviving an industry that is looking to break free from the financial crisis that has held them back for far too long.

Contact Information Jim Wagner

Partner-in-Charge, Manufacturing & Distribution Services

Phone: 262-754-9400

Email: [email protected]

Connect: www.linkedin.com/in/jamesjwagner1

Figure 10: Main uses of technology to improve performance

Businessintelligence and

reporting

Daily quallityanalysis

transformationor integration

Manufacturingprocesses

New or expandedERP integration,

process assessmentor redesign

14%14%

12%12%13%13%

21%21%


Survey Questions

1. What is your annual revenue?

a. Less than $1M

b. Between $1M - $10M

c. Between $10.1M - $20M

d. Between $20.1M - $50M

e. Between $50.1M - $100M

f. Greater than $100M

2. Does your business have international operations?

a. No

b. Yes

3. How many locations does your company have worldwide?

a. 1

b. 2 - 4

c. 5 - 7

d. 8 - 10

e. 11+

4. What is the approximate headcount of employees in your company?

a. 1 - 50

b. 51 - 100

c. 101 - 250

d. 251 - 500

e. 501 - 1,000

f. 1,001 – 2,500

g. Over 2,500

5. In what geographic region is your company headquarters located?

a. East

b. Located outside of North America

c. Located outside of the United States

d. Midwest

e. Pacific West

f. South


6. What is your specific industry?

a. Distribution

b. Equipment

c. Printing

d. Third Party Logistics

e. Transportation

f. Wholesale

g. Other

7. What are your revenue expectations for 2015 compared to 2014?

a. Decrease more than 5 percent

b. Decrease up to 5 percent

c. Increase more than 5 percent

d. Increase up to 5 percent

e. Stay the same

8. Currently, which of the following actions are among your company’s top priorities (select all that apply)?

a. Cutting operational costs

b. Developing new products and services in response to changing consumption patterns

c. Ensuring organization and responding quickly to changing economic condition

d. Long-term strategic planning

e. Reconfiguring supply chain

f. Restructuring company to position for growth

g. Restructuring management team

h. Seeking M&A opportunities

i. Seeking new markets for products and services

j. Short-term strategic planning

k. Other (please specify)

9. Are you planning capital expenditures in any of the following areas in 2015 (select all that apply)?

a. Computer hardware

b. Computer software

c. Manufacturing equipment

d. Office equipment

e. Plant expansion/modernization

f. Transportation equipment

g. Other (please specify)

Survey Questions continued...


10. What do you see as the main opportunity to grow your business in the next 12-18 months?

a. Increased share in existing markets

b. M&A

c. New geographic M&A markets

d. New joint ventures and/or strategic alliances

e. New operation(s) in foreign markets

f. New product or service development

g. Organic growth in existing domestic market

h. Organic growth in existing foreign market

11. How important is supply chain management to your plant’s success over the next five years?

a. Not important

b. Minor importance

c. Somewhat important

d. Important

e. Highly important

12. What percentage of sales is invested into new-product development (R&D)?

a. Less than 1 percent

b. 1 – 5 percent

c. 6 – 10 percent

d. More than 10 percent

13. In the next 12 months, do you expect your business’s raw materials cost to:

a. Significantly increase

b. Increase

c. Remain the same

d. Decrease

e. Significantly decrease

14. In the next 12 months, do you expect your business’s taxation costs to:


b. Increase

c. Remain the same

d. Decrease




15. In the next 12 months, do you expect your business’s labor cost to:


b. Increase

c. Remain the same

d. Decrease


16. How does your optimism regarding your company’s prospects compare to last quarter?

a. Less optimistic primarily due to external factors (i.e. economy, industry and market trends)

b. Less optimistic primarily due to internal/company-specific factors (i.e. products, services, operations and financing)

c. More optimistic primarily due to external factors (i.e. economy, industry and market trends)

d. More optimistic primarily due to internal factors (i.e. products, services, operations and financing)

e. No notable change

17. What system do you currently use to prepare your Key Performance Indicators (KPIs)?

a. Custom built/legacy application (i.e. in-house application)

b. Dedicated application for advanced planning (i.e. advanced application)

c. Financial application module (i.e. ERP system)

d. Spreadsheets and manual processes

e. Other

18. How do you measure the success of your Key Performance Indicators (KPIs)?

a. Predetermined organizational goals

b. Published statistics from an industry source

c. Other

19. Is your company considering an M&A this year?

a. No

b. Yes

20. Has your company initiated an M&A this year?

a. No

b. Yes



21. In 2015, operational spending will increase on (select all that apply):

a. Advertising

b. Business acquisition

c. Business intelligence

d. Facilities expansion

e. Geographic expansion

f. Information technology

g. Internet commerce

h. Marketing and sales promotion

i. New product or service introduction

j. Research and development

k. Other

22. In 2015, expected barriers to business growth are (select all that apply):

a. Capital constraints

b. Competition

c. Decline in demand from domestic U.S. markets

d. Decline in demand from overseas markets

e. Decreasing profitability

f. Healthcare costs

g. Higher interest rates

h. Industry-specific regulation (i.e. environmental regulations, health care regulations, labor regulations, trade regulations and taxation issues)

i. Inflation

j. Lack of qualified workers

k. Legislative/regulatory pressures

l. Monetary exchange rate

m. Oil/energy prices

n. Pressure for increased wages

o. Taxation policies



23. Our company uses technology to improve performance of (select all that apply):

a. Business intelligence and reporting

b. Collaboration with business partners

c. Consolidation of critical systems

d. Data quality analysis, transformation or integration

e. E-commerce

f. Enterprise architecture

g. Manufacturing processes

h. New or expanded ERP integration, process assessment or redesign

i. Supply chains/distribution

j. Sustainable cost reduction

24. Do you think your industry will contract, stay the same or expand over the next 12 months?

a. Contract

b. Expand

c. Stay the same

25. In 2014, our international sales have:

a. Decreased

b. Increased

c. Stayed the same

d. N/A – We do not have international sales

26. In 2014, our company’s inventory turnover has:

a. Decreased

b. Increased

c. Stayed the same

27. In 2015, we expect hiring to:

a. Decrease

b. Increase

c. Stay the same

28. What is your view of the world economy over the next 12 months?

a. Declining

b. Growing

c. Unchanged



29. Are you more or less optimistic about the U.S. economy compared to last year?

a. Less optimistic

b. More optimistic

c. No change

30. What are the top two business drivers impacting your technology strategies? (Please select two)

a. ERP industry consolidation (application vendors being acquired)

b. Global market factors impact where products are made, bought and sold

c. Issues between multiple business systems

d. Issues across multiple manufacturing locations

e. Issues with customers/suppliers

f. Improve customer service and response time

g. Reduce costs

h. Our own growth expectations

i. Regulatory compliance requirements (SOX, IFRS, HIPAA, FDA, etc)


Manufacturing Report 2015: Overcoming the Five Barriers to Business Growth

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Transcript of Manufacturing Report 2015: Overcoming the Five Barriers to Business Growth