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Category: Trade and Mfg News

Manufacturing Infographic: Report Calls for Greater Flexibility to Improve Revenues, Production, and Labor Efficiency

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Accenture Manufacturing Infographic Calls Explains State of Manufacturing In Survey With 250 Top Manufacturers

Each year Accenture takes a look at the state of manufacturing and this year is no different…..except they took it a big step forward in the way you consume that information. Accenture has not only create a comprehensive easy to understand infographic, but also created a quite immersive interactive website to explain the findings in the report. On their website, the main conclusions they tout are around operational flexbility, stating:

Accenture’s global manufacturing research study reveals that companies must have greater operational flexibility to substantially increase revenues and margins, boost production levels and improve labor efficiency.

In particular, with this study Accenture wanted to understand how manufacturers are performing and what initiatives they are embarking on to align their operations with market challenges and opportunities. We had 250 senior manufacturing executives from around the world participate this year, and they represented companies with annual revenues that range from $500 million to more than $50 billion.

How are Manufacturers Performing These Days, Still a Pretty Tough Market?

You’re right, it’s definitely a challenging time to be a manufacturer. But Accenture actually found that those participating in our study are doing pretty well. Production levels, revenues, and profitability have all increased during the time for the vast majority of them. And most manufacturing executives are optimistic about continued growth in the future. In fact, executives believe their most important markets will offer plenty of growth opportunities.

However, there are still things that could stand in the way of growth. Most of these would be classified under the broader category of volatility—such as global currency instability, unpredictable commodities costs, uncertainty about customer demand and where that demand is going to come from, political and social unrest, and then obviously government regulations that might be imposed upon them. So although manufacturers are growing and confident about their prospects in the future, there are always risks that they need to watch out for.

View the Accenture Manufacturing Infographic Below

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Promoting Revitalization of the US Manufacturing Industry

The US manufacturing sector is on the rise, which was not the case previously. The growth in the automotive industry supports the success that continues to make these industries thrive within the US. Another factor is that improvement of domestic plants cost competitiveness, in comparison to the rise of manufacturing expenses as a result of high wages in other countries, draws attention of majority back to the US manufacturing industry. Here are some of the attributes that will help revitalize this industry.

 

Colleges as career factories

As the need to replace retiring employees within the US manufacturing field continues to rise, there is the threat of recruiting new hires from community colleges that offer generalized training. A new measure in place to provide job-training programs will help deal with the issue. Collaboration with community colleges to offer programs that the industry needs will be the other way to deal with this challenge.

Creation of regional centers of expertise

Manufacturing innovation and realization of new business opportunities lead to production of hi-tech and high-margin products. They can achieve this through creation of regional centers of competence that specialize in a particular area and leverage on that as well will make this achievable.

Value-addition on exports

The idea to make import more expensive than exports will also help revitalize the US manufacturing industry. To achieve this, there is a plan for those who ship products from the US, to acquire certificates equal to the value of their exports, while importers acquire certificates from exporters. That means exports become cheaper and this will make US goods more competitive.

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Effect of Digitalization on Personnel on the Manufacturing Shop Floor

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Manufacturers all around the business world are bracing for change. The ever-changing face of digital technology has led to reinvention of manufacturing. There is no place the impact of digitization hits more than the shop floor, which is the heart of any organization. To understand the impact, consider the following factors.

Operational excellence

Reliability and efficiency are the driving force for any manufacturing enterprise that yearns for success and make an impact in the market. Changes in the way you can configure, make, assemble, and pack items is what determines efficiency.

For this services to pan out perfectly for better productivity, better and improved systems are imperative. Personnel at this level understand meeting customer’s current expectations is next to impossible at most. In most manufacturing enterprises, profits or losses occur at the shop level, so it is important to have up to date systems. Digitization does not only determine increase or decrease of reliability of systems, but it also improves the efficiency of services at this stage. Strategy teams in a manufacturing enterprise should prioritize improving the shop floor first.

Examinations of core systems

Evaluation of revenue generation opportunism is critical. Managers and directors understand which areas have loopholes, where the enterprise is falling short of expectations, where there is poor communication, or where there is unavailability of data that slows down the decision-making process. Often the stumbling block for systems is inefficient ERP solutions. If any manufacturing enterprise is to make progress in the competitive market, then their ERP solutions should meet the challenge of digitization.

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Manufacturing and Trade News: A Gloomy Outlook for Growth

International Trade on Red Container.

In late September the World Trade Organization (WTO) revised its previous forecast for global trade for both 2016 and 2017, reducing its growth estimates to 1.7% and 1.8%, respectively. This presents a stark contrast its projection from a year ago, which estimated that trade would expand by 3.9% this year.

And with global GDP expected to grow 2.2%, the WTO notes that 2016 will mark the “slowest pace of trade and output growth since the financial crisis of 2009.” Several issues were presented as possible causes of the diminished outlook, including Brexit’s long shadow, financial volatility in developed countries and the possibility that anti-trade rhetoric will impact trade policy.

The International Monetary Fund’s (IMF) recent World Economic Outlook report was similarly stark, stating that the volume of world trade has “grown by just over 3% a year since 2012, less than half the average rate of expansion during the previous three decades.” The Fund, which in July had forecast 2.2% economic growth for the United States in 2016, revealed concerns regarding U.S. trade and manufacturing, weakening its predicted U.S. growth to just 1.6%.

In the midst of this global trade slump, and looking out onto a horizon of disappointingly slow growth, the leader of the IMF, Christine Lagarde, stated that trade restrictions would leave U.S. workers and families “worse off.” She also warned that “to turn our back on trade now” would “[choke] off a key driver of growth.”

However, all is not lost. As detailed by U.S. News, the strong dollar and weak outlook on global growth may mean that we can expect U.S. manufacturing to  “flatline.” However, they estimate that service industries and construction may step as leaders to propel the economy forward.

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