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Proof in Numbers: US Manufacturing Performance Continues to Improve

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If you have followed the Cerasis blog over the last year, although we are a third party logistics provider, our goal to our readers is to not only talk about what we do, logistics and freight management, but to bring news and best practices which affect our customers: Manufacturers and distributors (or those who ship freight in North America). In this same period of us starting our first year of the blog, we have also seen many great things come out about the growth and recovery of US Manufacturing. These subjects we have written about at length, such as our Skills Gap series, our Reshoring series, and all the posts you can find in our manufacturing category.

In Today’s posts, we want to wrap up some of these subjects and provide the hard facts that show that the US Manufacturing sector continues to put it’s collective head down and focus on long term sustainable growth.

Facts: US Manufacturing Performance Continues to Improve Sustainably 

With all the coverage in popular media outlets over the last few years, it would be hard not to have awareness of a claimed resurgence in the U.S. manufacturing industry. Beyond just a casual awareness, perhaps you also have been exposed to some of the most frequently cited factors driving this resurgence – or at least those that the press feels you might be interested in tuning in hearing about. As such, you might have come across discussions noting the positive impact of new energy production in North America on U.S. manufacturing. Or perhaps you have been exposed to information explaining that rising wage costs in competing counties such as China have pushed more manufacturing back to U.S. shores. No doubt, there is truth in many of the causal factors in circulation today regarding the improving U.S. manufacturing scene.

But is it true that recent improvements in the health and output of the U.S. manufacturing industry are solely due to factors extraneous to that industry itself? If so, how sustainable is this advertised resurgence? In all likelihood, if this trend truly is based only on extraneous factors that could just as quickly turn against U.S. manufacturing in the future, then the answer to this rhetorical question on sustainability has to be in the negative.

So this leads us to ask a follow-on question: Is there evidence of sustainable performance improvement from within the U.S. manufacturing industry itself that could also be contributing to its revived presence on the global stage? We are happy to say the answer to this question is most definitely in the affirmative. As an example, let’s review the latest findings on performance improvements within U.S. manufacturing from a recent study that was jointly conducted by MESA International (MESA) and LNS Research (LNS).

In an article published by LNS, an analysis of the most recent (2013) results from the “Metrics That Matter” survey by MESA was presented (MESA has conducted this annual survey since 2006 with a broad spectrum of manufacturers globally). This analysis endeavored to uncover findings in that survey that offered insight into what areas were contributing the most to performance improvements within the US manufacturing community. From that analysis, eight high level areas of performance improvement were cited, each of these eight areas themselves being derived from a much larger subset of data tied to detailed metrics and key performance indicators that MESA investigated with its survey respondents. In no particular order of priority, here is a sampling from those eight key areas driving performance improvements from within the US manufacturing industry itself:

  • us manufacturing performance 300x199 Proof in Numbers: US Manufacturing Performance Continues to ImproveFinancial Performance Improvement, 2012 to 2013 = 8.6%
    This finding was distilled from survey responses on a variety of core metrics including Total Manufacturing Cost per Unit Excluding Materials, Manufacturing Cost as a Percentage of Revenue, Net Operating Profit, Productivity in Revenue per Employee, Average Unit Contribution Margin, Return on Assets/Return on Net Assets, Energy Cost per Unit, Cash-to-Cash Cycle Time, EBITDA, and Customer Fill Rate/On-Time Delivery/Perfect Order Percentage.
  • Innovation Performance Improvement, 2012 to 2013 = 7.8%
    Derived from underlying findings such as Rate of New Product Introduction and Engineering Change Order Cycle Time.
  • Efficiency Performance Improvement, 2012 to 2013 = 17.0%
    Top metrics from which this finding was derived included Throughput, Capacity Utilization, Overall Equipment Effectiveness (OEE), and Schedule or Production Attainment.
  • Responsiveness Performance Improvement, 2012 to 2013 = 10.0%
    Detailed metrics from which this high-level factor was complied included On-Time Delivery to Commit, Manufacturing Cycle Time, and Time to Make Changeovers.
  • Quality Performance Improvement, 2012 to 2013 = 13.7%
    Metrics used to generate this improvement factor included Production Yields, and Customer Rejects/Return Material Authorizations/Returns, Incoming Quality from Suppliers.
  • Inventory Performance Improvement, 2012 to 2013 = 15.0%
    This finding was based on changes in inventory turnover ratios for WIP.
  • Maintenance Performance Improvement, 2012 to 2013 = 14.7%
    This finding was distilled from detailed metrics including Percentage Planned vs. Emergency Maintenance Work Orders and Downtime in Proportion to Operating Time.
  • Compliance Performance Improvement, 2012 to 2013 = 14.7%
    Derived from underlying metrics including Reportable Health and Safety Incidents, Reportable Environmental Incidents, and Number of Non-Compliance Events per Year.

As can be discerned from the findings highlighted above, manufacturers in the U.S. have been working hard to improve their competitiveness on the global stage. Certainly overseas competitors have been making improvements as well, but improvements of this magnitude are not easily obtained, especially when using prior year performance in a mature marketplace such as the US manufacturing sector as a basis for comparison. Sustaining future year-over-year improvements such as this within the US manufacturing sector will go a long way in sustaining the rebirth of this U.S. industry, regardless of which direction the winds of extraneous good fortune happen to be blowing.

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adam robinson Proof in Numbers: US Manufacturing Performance Continues to Improve
Adam Robinson oversees the overall marketing strategy for Cerasis including website development, social media and content marketing, trade show marketing, email campaigns, and webinar marketing. Mr. Robinson works with the business development department to create messaging that attracts the right decision makers, gaining inbound leads and increasing brand awareness all while shortening sales cycles, the time it takes to gain sales appointments and set proper sales and execution expectations.
adam robinson Proof in Numbers: US Manufacturing Performance Continues to Improve

@Cerasis

Third Party logistics company (3PL) empowering shippers via a transportation management system (TMS) & integrated managed transportation services.
adam robinson Proof in Numbers: US Manufacturing Performance Continues to Improve
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