By Tracy Will
For WisBusiness.com
Wisconsin’s large manufacturers are more likely than small firms to be engaged in some “next generation” practices that will help them reach world-class performance levels, according to a new study released Wednesday by the Wisconsin Manufacturing Extension Partnership.
It concluded that Wisconsin’s smallest manufacturers (those with less than $10 million in annual sales) are more likely to face challenges in achieving world-class performance, although there are areas — like sustainability — where smaller companies can more easily excel. While the study showed some disparities between large and small companies, it also showed that firms of any size could follow strategies to become world class.
“For firms that implement these strategies, they get great results,” said Mike Klonsinski, the executive director of WMEP. “This says to us that you are not precluded from winning because you are small. Small manufacturers are less likely to start the efforts and large companies tend to be more out-front in pursuing these strategies.”
WMEP released the survey results at Standard Imaging in Middleton, one of the firms that has used the next generation manufacturing approach for its radiation therapy calibration equipment business.
The $150,000 study — which surveyed more than 500 state manufacturing firms, including 286 from the seven-county region arouind Milwaukee, 79 from the Fox Valley and Lake Michigan, and 98 firms from the south central region including Dane and Rock counties — used six general areas to measure “next generation” activities. Those areas: customer-focused innovation; staff development and retention; superior processes and improvement; supply chain management and collaboration; global engagement; and green manufacturing processes and sustainability.
Some key findings, according to WMEP:
- Wisconsin firms have considerable opportunity to leverage international sales. Just 7 percent of firms reported non-U.S. sales growth of 51 percent or higher. Nearly two-thirds of Wisconsin manufacturers (63 percent) reported that they have no sales or distribution facilities beyond the United States.
- The study reveals a worker training deficit: 29 percent of Wisconsin manufacturers reported that they annually provide 8 or fewer hours of formal training per employee. Only 1 in 10 respondents provide more than 40 hours of annual training, a level considered world-class.
- A majority of Wisconsin manufacturers ranked support services, peer groups and training opportunities in their geographic region as average or higher for most next generation strategies.
As the first state in the nation to conduct this type of study Wisconsin now has a benchmark for Wisconsin manufacturers to measure progress toward “world-class” manufacturing standards.
“This survey allows Wisconsin companies to compare themselves with world manufacturing standards, and we are encouraging other states to do this,” Klonsinski said.
He also said the approaches outlined in the study have support in Wisconsin.
“Commerce Secretary Richard Leinenkugel takes this very personally considering his background in the brewing industry, and has been promoting this approach over his first months on the job,” Klonsinski said, adding that Leinenkugel was briefed on the study results on Tuesday.
Study coordinator John Brandt of the Cleveland, Ohio-based Manufacturing Performance Institute, said the study was a “pretty important product, a key milestone, getting national attention and is something that has not been done to forward manufacturing as a policy perspective.”
He also said eight more states are planning to conduct a similar study in the coming years.
