A national study was recently released by the American Small Manufacturers Coalition (ASMC) and co-conducted by Manufacturing Extension Partnership (MEP) centers across the country, shows that US manufacturing is woefully under par in its ability to compete in the future economy. The study details six strategies essential for global competitiveness today and in the future:

Customer-Focused Innovation (CFI)

Engaged People/Human Talent Acquisition, Development and Retention (EPT)

Superior Processes/Improvement Focus (SPI)

Supply-Chain Management & Collaboration (SCM)

Green/Sustainability (GS)

Global Engagement (GE)

The study found that over a quarter of American manufacturers – representing over 90,000 firms – are at risk because they are not at or near world-class in any of the six strategies. In addition, small and midsize manufacturers are less likely than larger firms to be at or near world-class status in each of the next generation strategies. In a country where 282,000 small and midsize firms comprise the backbone of the industry, this is a significant threat to U.S. competitiveness and the viability of these companies.The study identified the following threats to the ability of U.S. manufacturers to develop these strategies and compete in a fast-changing 21st century global economy:

Green/Sustainability ranks low among the strategic priorities for U.S. manufacturers despite increasing government regulation, growing consumer demand, and new requirements from large downstream manufacturers in their supply chains. Only 16% of respondents rank green/sustainability as highly important to their success over the next five years. Surprisingly, another 16% said it was not important.

Only 28% of respondents believe global engagement is highly important despite a near-term future in which markets, talent, competitors and partner opportunities are growing faster outside the U.S. than within its borders.

In an increasingly networked world, trusted partnerships are a key competitive advantage, but today effective partnerships with employees,suppliers and regional support organizations are the exception rather than the norm. For example, the majority of respondents engaged less than half of their employees in their organizations’ continuous improvement initiatives. Less than one-quarter of respondents engage their suppliers in their operations, product development or continuous improvement efforts.

Leadership loss represents a significant threat – or opportunity. One quarter of respondents say a planned leadership succession will occur within the next five years – potentially impacting 80,000 U.S. manufacturing firms. Another 29 percent think a succession may occur. This transition represents an opportunity to inject new ideas, energy and skill sets into the firms but also represents a significant risk where a succession plan is not place.

Measurement systems are inadequately deployed. Comprehensive measurement systems are an indication of strategy commitment and a requirement for effective implementation. Yet few respondents have strong measurement systems in place. Even in one of the most fundamental and easiest-to-measure areas - process improvement - 46% of the firms had only ad hoc measurement systems, or worse, none at all.