The Krannert School's Dauch Center for the Management of Manufacturing Enterprises (DCMME) and Global Supply Chain Management Initiative (GSCMI), in partnership with the certified public accounting firm of Katz, Sapper & Miller LLP, released the results of their fourth annual Indiana manufacturing survey, The Gear and Fulcrum: Performance and Practice of Indiana's Manufacturers.
More than half of the respondents to the survey reported that the recent economic downturn had a significant, negative impact on sales volume. The study did, however, indicate that Hoosier manufacturers expect steady or improved results in 2010. Other key findings reveal:
Internal Supply Chain — Suppliers are often not deeply involved in the manufacturing process in such a way to maximize the efficiency of the supply chain. This suggests that improvements in technology, communication, and other areas could increase the overall supply chain profitability.
Staffing — The demand for workers has declined. Most workforce changes occurred on the shop floor and in administration, with minimal changes in purchasing, human resources and sales. The location of job cuts indicates companies may be anticipating the need to ramp up operations quickly after the recession.
Global Opportunities — Hoosier manufacturers with a greater focus on globalization tend to be more successful than those companies focused solely on U.S. markets.
New Products — Survey respondents indicated that they are looking outside of their current markets for growth opportunities. Alternative energy was the area reported as being favored by most respondents.
"This year's study suggests that past ‘business as usual' practices are being re-evaluated, resulting in innovations among forward-thinking manufacturers," says Scott Brown, partner-in-charge of Katz, Sapper & Miller's Manufacturing and Distribution Services Group. "Such changes may hold the key to emerging successfully in 2010."
The survey goes on to reveal that while many Hoosier manufacturers believe that their own internal company changes are necessary, additional considerations for their long-term success must include a renewal in consumer confidence, greater access to traditional financing, and the recovery of the automotive industry.
"We found that companies have actively focused on improving their supply chain competitiveness by examining every aspect of their business and choosing to do what they are best at or finding other companies to assist," says Krannert professor Ananth Iyer, director of DCMME and the Susan Bulkeley Butler Chair in Operations Management. "The best performers through this economic transition also took advantage of global opportunities to find new markets and raw material sources.
"Companies are making critical and difficult moves that will position them for growth as the economy turns more favorable; they are exploring new opportunities in the wind, medical devices and defense sectors," says Iyer. "In short, Indiana manufacturing companies in the survey showed that they are ‘pulling themselves up by their bootstraps' and doing what it takes to become competitive."
Completed between April and August of 2009, the Gear and Fulcrum study used an online survey to provide insights into management choices made in 2009 by manufacturing and distribution companies across Indiana. Participants spanned the supply chain from raw material suppliers to final assembly OEMs. To view the complete results, visit www.krannert.purdue.edu/centers/dcmme_gscmi/Research/ 2009 Gear and Fulcrum Survey Report.pdf.