In 2020 and 2021, the U.S. witnessed a strange phenomenon: Some manufacturers were not only surviving the COVID-19 pandemic, they were actually thriving. While other companies struggled, these firms adapted and grew. How did they do it? What made them different?
To find out, Wipfli surveyed 194 U.S. manufacturers. Now, in a just-released manufacturing report, the firm’s Resilient Manufacturers Study delivers an explanation: Four foundational performance dimensions empowered these manufacturers to overcome the challenges of the last two years.
- Innovation: Forward-thinking, information-driven organizations develop business models that respond rapidly to change with innovative products, services and processes.
- Growth: These firms leverage strategies, goals and systems for growth, incorporating digital solutions to increase customer loyalty/retention, optimize profitability and revenue and ensure smart decisions based on timely business intelligence.
- Automation: They deploy automation to improve productivity, develop talent and improve customer experiences.
- Resiliency: They maintain positive work cultures that allow them to manufacture quality products at fair margins amid volatile markets, supply-chain and workforce fluctuations and cybersecurity threats.
However, the manufacturing report found that few manufacturers manage all dimensions well — or even have well-defined strategies. Nearly three-quarters of executives consider their companies to be a leader in at least one dimension, but only 7% are leaders in all four. Similarly, 64% have dedicated, well-aligned strategies for at least one dimension, but only 15% have them for all four.
The good news: Becoming a resilient manufacturer begins by creating dedicated strategies and goals. Those manufacturers with dedicated strategies for a performance dimension are far more likely to be leaders in that dimension. For example, 53% of those with a dedicated innovation strategy consider themselves to be leaders in innovation, versus just 36% of those without one.
“Following the four paths to resiliency across operations, R&D, finance, human resources, sales, procurement — these are critical functions, and it’s a complex undertaking,” said Bill Boucher, partner and manufacturing, retail and distribution practice leader at Wipfli. “The report shows manufacturing executives must regularly review leading indicators for each of these activities to respond to performance issues before they swamp the bottom line.”
The study reports on a range of manufacturing trends and concerns — from how long it takes manufacturers to get new products and services to customers, to annual turnover rates for managers and frontline employees, to the number of data breaches manufacturers are experiencing per year.
Download a copy of the Resilient Manufacturers Study.