From @NACFAM and Fred Wentzel: Unstable Economy Remains Chief Concern for Manufacturers

Dec. 6, 2011

From Fred Wentzel's weekly newsletter, "Manufacturing Trends." To subscribe visit

From Fred Wentzel's weekly newsletter, "Manufacturing Trends." To subscribe visit

Unstable Economy Remains Chief Concern for Manufacturers( 11-23-11)   While 66 percent of manufacturers expect to experience revenue growth in 2012, many say the recovering economy will remain a major hurdle to operations, according to a recent ASQ survey.Nearly 1,600 manufacturing professionals from around the world responded to ASQ’s 2012 Manufacturing Outlook Survey, which was conducted online from Oct. 17 through Nov. 4. Respondents represent the aerospace, automotive, food, medical device, pharmaceutical and utility industries, among others.According to the survey results, more than 70 percent of respondents say they experienced revenue growth in 2011. In ASQ’s 2011 Manufacturing Outlook Survey conducted in late 2010, 67 percent had hoped to experience revenue growth in 2011.Despite the outlook regarding revenue, manufacturers continue to be wary of the global economy, citing the housing market and fears of a double-dip recession. Specifically, some respondents said:
  • “Customers are scared to release purchase orders. They act differently because of the economy.”

  • “Economic conditions are hurting people’s ability to purchase our products.”

  • “The housing market is not recovering in a timely fashion.”

In addition to fears of the world economy, manufacturers say the lack of a qualified workforce is inhibiting their ability to grow.According to the survey results, 44 percent of respondents say finding qualified applicants is the biggest hurdle to filling vacant positions, while 27 percent say budget is a biggest hurdle to filling open positions. Twenty-three percent claim time -- and the lack thereof -- is the biggest hiring hurdle. Retiring employees pose minimal effect.Survey results show few manufacturers think their company will be adversely affected by retirements in 2012.On a scale of one to 10, where one is “very unlikely” and 10 is “very likely,” nearly 68 percent of respondents said retirements were “unlikely” to affect their business, including 26 percent who said retirements were “very unlikely” to affect the organization. Only 9 percent said retirements were “very likely” to affect the business.And when retirees leave, many businesses consider options about refilling the position. According to the survey:
  • 54 percent of respondents consider the positions on a case-by-case basis.

  • 26 percent simply hire a new worker to replace the retiree.

  • 18 percent leave the position unfilled and delegate responsibilities to existing employees.

  • 2 percent completely dissolve the position and duties.

When new employees are hired to replace retirees, many companies rely on on-the-job training to help bring the new employee up to the production level of the outgoing retiree.In fact, 87 percent of respondents say they use on-the-job training, while 5 percent say their business requires company-provided classroom training, and 2 percent said they use third-party training, like local colleges or other training providers. The remaining respondents say they use any combination of on-the-job training and classroom training.“While many manufacturers are showing improvement and experiencing revenue growth, there remains clear hurdles facing these businesses,” said ASQ CEO Paul Borawski. “Even though companies say retiring baby boomers aren’t adversely affecting their businesses, finding qualified employees is still a concern -- one that can affect businesses in this global economy -- as retiring employees often leave with a wealth of knowledge not easily replaced.”(ASQ is a global community of people dedicated to quality who share the ideas and tools that make the world work better. It is headquartered in Milwaukee, WI, with national service centers in China, India, and Mexico. Learn more about ASQ’s members, mission, technologies, and training at

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