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Is Help on the Way for Manufacturers?

By Trucktruth.com, July 27th, 2009

MAPI, The Manufacturer’s Alliance, is reporting that the outlook for the manufacturing sector shows very little direct gain in the near term. However, the massive Stimulus Bill will help industries associated with construction, new sources of energy, and—to a lesser extent— information technology. It appears that any additional assistance to the beleaguered auto industry will be minimal, as the Administration is shy about promoting another major bailout.

Short Term Predictions
Management at manufacturing companies will continue to “right size??? their supplier base to gain efficiencies and leverage volume requirements.
Relationships matter, but so do metrics. Measurements against benchmarks will impact a suppliers’ ability to retain its preferred status and require value-based justification.
Effectively managing costly assets of manufacturers, such as lift trucks, will be reviewed in cost-savings scenarios.

Bright Spots
The Purchasing Manager’s Index for March is showing its third straight gain, following 12 consecutive losses. An up tick in new orders, combined with a reduction in inventory levels, is seen as a sign of firming consumer demand. If consumer spending continues to improve, we could be on track to see manufacturers start to bring factories back on line.
Over the last ten years, the manufacturing industry has reconfigured production facilities to perform basic, or core, functions internally, while outsourcing activities which can be handled more efficiently elsewhere. Look for feeder plants to be among the firstoperations having requirements to upgrade equipment, as they will lead the supply chain demand with early orders.