Survey: Hoosier Manufacturing Gets Stronger
The certified public accounting firm of Katz, Sapper & Miller LLP today released the results of its annual Indiana manufacturing survey. As reported by Inside Indiana Business, the “2011 Indiana Manufacturing Survey: Performance, Practice and Strategy” indicated that Hoosier manufacturers are strong and getting stronger.
“This study has some of the most encouraging findings we’ve seen in years,” said Scott Brown, partner-in-charge of Katz, Sapper & Miller’s manufacturing and distribution services group. “It suggests that many Indiana manufacturers are once again investing in their businesses and holding their own against the competition. Such investments and improvements are the key to Hoosier manufacturers remaining successful.”
Other key findings reveal:
• A majority of Indiana’s manufacturers reported “healthy” or “stable” financial performance over the past two years. Equally encouraging, the waves of cost-cutting in recent years by manufacturers now appear to be rapidly receding, with less than 25% of survey respondents reporting cost-cutting as their strategy for future financial success. Additionally, 60% of Hoosier manufacturers reported that they are now increasing investments across the business and in areas essential for revenue growth.
• When asked about future financial priorities, the top three goals of Indiana manufacturers are: 1) improving cash flow and working capital management; 2) improving short- and long-term operational efficiencies; and 3) accessing credit for working capital. All of these strategies are designed to not only improve financial health but also help ensure survival in today’s demanding business environment.
• In terms of job growth for 2011 and beyond, 11% of survey respondents plan to open new manufacturing facilities in the next two years. Of those respondents, all favored Indiana over other locations due to Indiana’s workforce, central U.S. location and transportation network. Just as encouraging, 13% of respondents reported that they anticipate relocating or “onshoring” some manufacturing back to America in the next several years. Chief among those reasons cited were obtaining better control over production, closer proximity to major customers and markets, and reduced total “landed” costs.
The survey also revealed specific business, manufacturing and supply-chain strategies for manufacturing to be competitive. First, superior product design and customer service are keys to new growth. Second, smart manufacturing and process improvements lead to financial success. Third, supply chain integration is linked to better customer service and inventory control. Together, these findings suggest that the roadmap for successful manufacturing consist of:
• Crafting a business strategy that features superior design and delivery for new products as well as outstanding customer service for more mature goods.
• Picking a path in terms of manufacturing improvement. The strongest strategies are those featuring either advanced smart manufacturing technologies or process improvements (or both).
• Leveraging upstream suppliers and downstream customers in the supply chain. Since no manufacturing company operates in a vacuum, manufacturers working together with their customers, suppliers and transportation providers reported significantly better performance versus those that do not.
To view the complete results of the 2011 Indiana Manufacturing Survey: Performance, Practice and Strategy, visit www.ksmcpa.com/2011_indiana_manufacturing_survey.