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From the Desk of Jack Healy, Viewpoints on the State of Manufacturing

Industry Shifts – Redefining Manufacturers

The Manufacturers News Inc., publisher of manufacturer’s directories since 1012, has compiled its 2010 statics for the New England states that reflected the fallout from the not so great recession of 2009. 

Manufacturer’s News Inc. – 2009 – 2010
Summary of New England


Number of Plants Closed

Percentage of Change

Number of Jobs Lost

Percentage of Change































Totals US





Increased competition, technology changes, improved productivity, etc. all has an influence on the changes indicated above. Certainly one factor should be realized in that manufacturing in the aggregate has not grown. There are far fewer start up’s necessary to replace firms that have gone out of business and there are limited attempts for businesses to reposition themselves and to grow their businesses here.

In a changing world, we still have the majority of enterprises not developing new products, new processes or new customers. We still have many firms who continue to remain homebound ignoring the potential of growing export markets so while most manufacturing enterprises have adapted to their current economic structure by seeking ways to minimize costs, they are doing so without any formal plan to grow their business.

Without such plans for growth we will continue down the path of contraction as we have continued to do so for the past thirty years. While there may be some satisfaction, relative to Massachusetts performance as shown in the above table as compared to the other New England states, it is misplaced. The loss of 284 manufacturing establishments is approximately 50% higher than the average loss trend since 2001. While some of the loss may be rationalized as being low value enterprises subjected to global competition such as textiles, that accounted for 15% of the total enterprises closed since 2001 or printing firms that accounted for 13% of the closed manufacturing establishments since 2001 which have been the casualties of digital technology changes.  However the most surprising loss of manufacturing establishments that came in this period came in base manufacturing industries such as electronics, machinery, and fabricated metals, all of which accounted for 43% of plant closing in this period.

With this bad news comes some good news for a change – as noted by Peter Drucker – “The opportunity for innovation occurs when the foundations of industry shift.” Well our foundations have shifted, to the point where the majority of the respondent manufacturers are now looking for new opportunities.

In the just concluded MassMEP survey of 170 manufacturers the respondents indicated that the three biggest challenges facing them were ranked as follows:
* 71 % ranked – ongoing continuous improvement/cost reduction strategies as their biggest challenges
* 56% ranked identifying growth opportunities as being their second biggest challenge
* 54% ranked product innovation/development as being third

These same results were reflected in the NIST/MEP National Survey that had 7,635 manufacturers respond.

The fact that the majority of surveyed manufacturers, both locally and nationally, have elevated the development of new markets and new products as one of their top three business challenges represents a tsunami for future growth.

Manufacturers after the past recession have the available production capacity for new business. Few firms are currently consumed with trying to get their maximum production out the door. In addition, manufacturers looking beyond cost reductions have the available talent to support a revaluation of their product lines. This is especially true when you consider that 36.4% of our nations engineers work in manufacturing and support 70% of the nations industry funded research and development.

If manufacturers are to continue to be key in the development of our country’s innovation capability and if manufacturing is to remain the number one sector contributing to the states gross product, we will need the majority of efforts of the surveyed manufacturers at least to be focuses on new markets and new products.

To assist the manufacturers planning for change the MassMEP offers Tech Scouting a complete consulting service that can provide a real world cost effective analysis of their market opportunities. As outlined, Tech Scouting, provides a process that delivers actionable solutions relevant to the needs of the client. Interested manufacturers can contact Mike Prior for an assessment relative to the application of Tech Scouting to meet their needs.

For manufacturers interested in possible new product opportunities you can register for the upcoming Mass Made – reinventing manufacturing in Massachusetts, a one-day workshop on the interface of design and manufacturing.

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