What Wisconsin manufacturers know

The Wisconsin Center for Manufacturing & Productivity’s (WCMP) recent study of Wisconsin manufacturers offers some context for the disruptive times we live in and highlights how operations adjust and transform themselves for an uncertain future. The Wisconsin Manufacturing Report identified the pandemic’s impact on manufacturers, clarified the challenges facing companies, and revealed a growing performance divide between forward-facing operations and those not making investments in the future.

The WMR resulted from a poll of 400 manufacturers across Wisconsin on issues ranging from growth concerns to the impact of the coronavirus. The WCMP then put context around the poll responses through five focus group discussions. This process generated terrific new data that provides insights across manufacturer size, industry, and geography. This study presents a great picture of Wisconsin manufacturing.

The report showed how COVID made everyone’s life more complicated. Manufacturers rose to the challenges of staying safe, remaining open, and meeting increasing demand. New safety requirements forced manufacturers to rethink everything from physical layouts to how employees entered the workplace. They built new structures, changed procedures, and invested in new equipment to maintain social distancing and reduce viral spread. Those that embraced change were able to operate efficiently while remaining safe.

Manufacturers face more issues than COVID. The Wisconsin Manufacturing Report showed that supply chain difficulties rose to the same level as workforce concerns. Larger companies saw workforce as their top challenge, while smaller operations ranked supply chain problems number one. These two issues are interrelated, as workforce issues deepen supply chain problems and supply chain knots require more workers. Both will remain challenges for the foreseeable future because neither have quick — or simple — solutions.

The WMR revealed cybersecurity as one issue where manufacturers may underestimate their exposure. Over 80% of those responding feel secure in their cybersecurity preparations. That number falls to 61% among manufacturers who experienced a successful attack. Cyberattacks are existential threats, as statistics show that over 40% of hacked companies don’t exist in the same form two years after the attack. In addition, attackers are becoming smarter, more effective, and ubiquitous as technology improves and becomes cheaper. I also worry because the focus groups showed that too many companies rely on hope as a key element of their cybersecurity strategy. That’s frustrating because effective cybersecurity practices can be simply integrated with other best business practices.

The final major trend shows a growing bifurcation between companies that “get it” and those that don’t. The best companies lean into the future — investing in growth opportunities and new technology. They create and execute business plans that engage employees, embrace trends, and transform their operations. Their more traditional counterparts look to defend and extend their current operations. The gap between the two groups is growing as change accelerates. The laggards may never catch up — and will go out of business. The numbers suggest that this could be as much as 20% of our manufacturing base.

The Wisconsin Manufacturing Report presented great data and insights. It provided a clear view into manufacturers’ challenges and their mindsets. This information will help manufacturers assess how they relate to their peers and will help all of us make manufacturing stronger. It’s critical that we all act — leaning into the future, finding allies who can lighten the load, and setting all of us up for future success!

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