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ASQ Manufacturing Survey: Confidence in the Supply Chain Returns

Despite 83 percent of manufacturers…

Despite 83 percent of manufacturers being adversely affected by supplier inability to meet their needs in the past, only one third anticipate a parts or services shortage in 2017, according to ASQ’s 2017 Manufacturing Outlook Survey.

More than 1,125 manufacturing professionals from around the world responded to ASQ’s 2017 Manufacturing Outlook Survey, which was conducted online in November and December. Survey respondents represented a multitude of industries including aerospace, automotive, food, and medical devices.

According to the survey, 66 percent of manufacturers expecting a problem with suppliers are working closely with providers to resolve issues, while 35 percent are working with their suppliers’ competitor. Some manufacturers are stockpiling parts, while others are expanding their operations to create the necessary parts themselves.

ASQ Chair Pat La Londe said supply chains play a critical role in manufacturing, and companies simply can’t risk being without the necessary material they need to be successful.

“Companies need to carefully consider multiple options when faced with a shortage of materials or suppliers that can’t meet their needs,” La Londe said.

In addition to questions about their organization’s supply chain, the annual Manufacturing Outlook Survey also asked respondents about their financial outlook for 2017. Close to 72 percent of respondents said they expected an increase in their company’s revenue in 2017. Furthermore, 74 percent said they expected salary increases in 2017—up from 61 percent in the 2016 survey—and 46 percent said they expect their company to increase staff, compared with 37 percent last year.

While respondents are confident their companies will increase revenue, the top hurdle facing organizations continues to be the economy. More than 36 percent of respondents cited the economy as their greatest hurdle in 2017, down from 40 percent of respondents in last year’s survey.

Around 30 percent of respondents said the shortage of skilled workers will be their greatest challenge, followed by regulatory issues at 15 percent. Uncertainly about the government’s direction with a new president, global trade issues, and decreased demand for their products were identified as other areas of concern.

Only seven percent of respondents said a shortage of necessary parts is their greatest obstacle. In fact, respondents are satisfied with the quality and availability of materials, with 68 percent of respondents saying quality is the most important factor when considering suppliers. When suppliers are unable to provide the necessary materials, respondents said “don’t put all your eggs in one basket.” Openly communicate with suppliers to determine any potential risks, and have back-up plans—and back-up suppliers—to alleviate supply chain disruptions.

The survey also revealed that 59 percent of respondents said their organizations have formal processes to address supply chain risk, whereas 28 percent do not, and 13 percent aren’t sure.

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