That’s not likely to change anytime soon, if U.S. manufacturers take the right steps to ensure competitiveness going forward.
On the other hand, U.S. manufacturers do face significant challenges. While the earnings picture for many companies has improved the last several quarters, there’s been little revenue growth. Excess productive capacity in many industries makes it nearly impossible for goods makers to raise prices.
Given high U.S. labor costs, the only way U.S. manufacturers have thrived is by being flexible and cost-efficient. Over the years, while the number of people employed in manufacturing has fallen, total output has kept pace with a growing economy. More recently, it’s cost-efficiency and flexibility that have allowed manufacturers to increase earnings amidst a slowed economy.
To understand how manufacturers have been able to achieve these efficiencies, one must realize that all business processes rest on a technology infrastructure. U.S. manufacturers-better than those in any other country-have taken advantage of an evolving technology infrastructure to constantly rework business processes for maximum efficiency.
Efficiency comes from executing best practices. These can take many forms: using collaborative applications to get a true picture of demand, increasing production agility so as to decrease lead times, or improving product quality through access to real-time plant-floor data are just a few of the possibilities.
Each year, manufacturers spend between 2 percent and 5 percent of their revenues on information technology investments. It’s important that they spend that money wisely. With the entry of China into world export markets, the global competitive challenge facing U.S. manufacturers will get only more severe.
The quest for efficiency and flexibility means every employee must become a decision-maker. The technology platform and supply chain solutions you employ must accommodate demands for real-time information as a basis for those decisions. For example, delays associated with failed communications can raise purchasing costs for raw materials by hundreds of thousands of dollars.
As you think about these issues, know too that by combining a complete enterprise architecture with integrated, automated business processes, and then embedding analytical capability into those processes, Supply Chain Management puts you and your employees in the driver’s seat and furnishes you with the means for operational excellence, based on best practices and executed in a flexible, efficient environment.
Nearly 50 percent of capital investment today is information technology-related. Can you afford to spend your money on the wrong solution?