US manufacturing is regaining its former stature. Data supports optimism, a recent ThomasNet.com study indicates. But if the trend is to continue, the industry requires an infusion of new blood.
Buoyed by growth and confident about the future, American manufacturers are laying out an agenda for restoring their industry to its earlier glory, according to results of ThomasNet.com’s newest Industry Market Barometer® (IMB).
They’re pushing to revitalize their sector by creating jobs, nurturing relationships with US suppliers and advancing the “Made in America” ideal.
Participants in this most recent IMB included more than 3,700 buyers and suppliers of industrial products and services and 1,600 professionals from manufacturing companies (small and mid-sized). Researchers looked at their 2011 performance, their outlook for 2012, growth strategies, and targeted markets. Susan Orr, senior director, strategic marketing for Thomas Industrial Network, says company look for continued growth in several vibrant industries, including:
- Fabricated metals
- Aerospace and defense
- Energy and utilities
An “Incredible Year” for Manufacturers
The most recent IMB report is cause for optimism, informs Eileen Markowitz, president of Thomas Industrial Network: 2011 was a year of growth for American manufacturers. More than half of IMB survey respondents (53 percent) grew in the past year and three-quarters (75 percent) expect their companies to grow during 2012. Several significant themes became apparent, reports Susan Orr, senior director, strategic marketing for Thomas Industrial Network:
- 2012 looks to be a tipping point for American manufacturing, due to last year’s growth and the next year’s anticipated growth.
- On the hiring front: Despite unemployment, manufacturers face a skilled-labor deficit; they’re begging for workers
- A resurgence in “Made in America” is coupled with resurgence in quality focus
- The “onshoring” factor: As American manufacturers capture more international business, more jobs and business comes back home
- Online marketing has become vital to manufacturing companies’ success
The Thomas report provides at least one success story: Marketing Masters of Issaquah, Wash. “2011 was an incredible year for us,” reports Vice President Jacques Gauron. The company—which manufactures clip nuts, composite inserts, and self-locking fasteners for commercial airlines and aerospace OEMS—grew 30 percent, locked in $50 million in future sales, and added jobs.
Marketing Masters is but one example, indicates Orr. Other companies have experienced similar success. They attribute growth to several critical strategic directions:
- Focus on customer retention and service
- Competing more aggressively in core markets
- Developing innovative products and services
- Penetrating new markets in the US and overseas
- Increasing online marketing.
Help Wanted: Skilled Labor
Growth level ignites a new wave of investments among manufacturers. They transition revenue into equipment, hardware and software, and facility upgrades. Future demand requires as much attention to production capacity as to capital investment (on hardware, software and facilities) and revenue dollars. But human resource must fit into the equation.
“Growth means hiring,” Orr succinctly states.
Surveyed companies indicate problems filling positions with skilled labor. Nearly half express the desire to hire (48 percent), and they have openings for line workers, skilled trade workers and engineers. But filling positions is easier wished for than done. Respondents have ideas about how to fill the gap. Consider survey comments:
- “Not everyone needs a college degree; we really need highly trained and motivated blue-collared workers.”
- “Improve the attitude within the US regarding the desirability of manufacturing for the next generation.”
- “Create a feeder—apprentice programs—to equip youth with the needed tools to pick up manufacturing knowledge.”
“Made in America”
In addition to the labor shortage, pricing pressures and overseas competition present growth challenges. China’s ability to pay lower wages and charge less for products is a thorn that pricks. The United States responds with a “brand makeover,” says Orr. “We’re not looking at the old wood-sided station wagon anymore. Today, it’s a fancy sports car.”
She points to The Rodon Group, one of the largest US family-owned and operated injection molders, and a member of American Made Matters®.
“When our clients began to show interest in outsourcing to China, we began an international marketing and branding campaign to bring them back,” said Kevin McGrath, vice president of sales and marketing. “Offshoring increases the risk of poor quality control. Our customers now see that. By maintaining the quality inherent to US products, and keeping our prices competitive with China’s, we continue to expand.”
Rodon helped form a local manufacturing consortium of about 50 companies, to train middle- and high-school students from technology schools and then hire them. “This has helped Rodon fill positions such tool designers and machine operators,” says Orr.
There’s magic in an engineering career, she adds; a point that can’t be overlooked. “Today, this is what manufacturing is all about: imagination combined with engineering, and hands-on skills blended with computer science,” she describes. “Manufacturing is no longer about manual labor. As such, other companies in similar consortiums are creating internship programs with intent to hire.”
Online Marketing: Closing the Exportation Gap
IMB respondents are also capitalizing on America’s reputation for quality by ramping up their exports. Nearly seven out of 10, or 67 percent, are selling overseas, and more than one-third [37 percent] plan to increase their international sales.
Orr adds: “In the past year, 54 percent of respondents saw a rise in international business, compared to 49 percent last year.”
To reach new clients, overseas and at home, nearly nine out of 10 respondents (86 percent) are investing in online marketing this year, and more than half (52 percent) are increasing these investments. They report that their websites have helped them find new sources of business, improve customer service, and increase revenues.
Consider Arnold Machine: “Our website has become our number-one prospecting tool,” reveals Zach Arnold, president of the Tiffin, Ohio-based company, which makes custom equipment to automate the manufacturing process. “Not only have we expanded our footprint; we’re landing more profitable jobs.”
Choosing Manufacturing All Over Again
With that kind of demonstrable successes, manufacturers are bullish on their own careers. Nearly eight out of 10 (75.5 percent), according to the survey, would “do it all over again” if they were just starting out.
Now, they want younger generations to appreciate manufacturing, too. As one IMB respondent pointed out, excitement can be found in creating something tangible – “from engineering and design to the finished product.”
Susan Orr is senior director, strategic marketing with Thomas Industrial Network.
To download a complimentary report on the IMB findings, access www.thomasnet.com/imb. For more information, contact Linda Rigano, Thomas’ executive director, Strategic Services, at 212-629-1522 or at firstname.lastname@example.org.