Manufacturers' Risks and Rewards Accelerate in Global Supply Chain, Says New Study

Press Conference: WASHINGTON, D.C., Dec. 19, 2007

Watch Video from the Press Conference 

“Small and medium manufacturers account for 40 percent of U.S. production value, and their successes and failures can have a substantial impact on America’s economy,” said National Association of Manufacturers (NAM) President and CEO John Engler as he released the report. 

“Manufacturers must collaborate closely with new domestic and overseas partners to survive and thrive in the global supply chain. In today’s economy, small and medium manufacturers are more than just suppliers.  They are helping to create the new technologies, products, services and business models that are vital for success, both here and abroad.  By connecting with outside resources – customers, government, academia – small and medium manufacturers can swiftly expand their core competencies and gain economies of scale,” he said.

The new report, “Forging New Partnerships:  How to Thrive in Today’s Global Value Chain,” offers practical insights and strategies for small and medium manufacturers to optimize opportunities and minimize risks in today’s global value chain in four key areas:  harnessing innovation; building a skilled workforce; exporting and overseas growth; and financing.  It is cosponsored by the NAM; its research and education arm, The Manufacturing Institute; and RSM McGladrey, Inc.           

“Traditional supply chains are morphing under the pressure of a globalizing economy,” commented Thomas G. Murphy, Executive Vice President of RSM McGladrey, Inc.  “Manufacturers adhering to old supply-chain rules are putting their businesses in jeopardy by not adapting to new rules.  Large companies are handing off much of their innovation to small and medium companies that in the past merely built to specifications.  The new global manufacturing supply chain is a whole new frontier. This increased responsibility for firms comes with increased risk that is intensified by the unprecedented movement of goods around the world.”
   
“Forward-looking manufacturers are taking advantage of economic changes at home and abroad by becoming more critical players in the global supply chain,” added Tony Raimondo, Chairman, Behlen Mfg. Co. in Columbus, NE.  “Forging external partnerships was the key to our success.  While most of our business is U.S.-based, my company entered into a joint venture for manufacturing structural steel in China to be closer to our customers there.  We put in the technology and management, they put in the cash. Going global made us a stronger company, as we had to address weaknesses.”  The international effort has pushed this agricultural equipment manufacturer from a $32 million company in 1984 to more than $200 million in sales today, of which up to 10 percent is exported annually to more than 70 countries over the years.  Behlen Mfg. Co. has 1,100 U.S.-based employees.

“This new report will help manufacturers position their companies in larger, more expansive value chains and succeed in today’s global marketplace,” Engler concluded. 
The numerous best practices cited in the report are drawn from interviews and a roundtable discussion with NAM members, results of an annual survey by RSM McGladrey and insights from the U.S. Dept. of Commerce’s Manufacturing Extension Partnership (MEP).  The report is available at www.nam.org/supplychain. 

For a high resolution photo from Gov. Engler's press conference, click here.
 
The National Association of Manufacturers is the nation’s largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 states. The Manufacturing Institute is the research, education and workforce arm of the NAM.  For more information, visit www.nam.org/institute. 
  
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