Understanding Manufacturing Challenges

Understanding Manufacturing Challenges

In late 2018, the Manufacturing Extension Partnership (MEP) Program* commemorated its 30th anniversary by taking a step back to look at the beginnings, the reasons the Program came to be, and how MEP can continue to deliver on its mission to strengthen and empower U.S. manufacturers well into the future. And this fiscal year marks the 10th year clients were asked about the manufacturing challenges they are facing as part of the NIST MEP Client Survey.

Over the last 10 years, the data gathered from the client challenges question has helped the MEP National NetworkTM get a peek at what is on the minds of CEOs. Understanding the business and economic factors that influence companies helps the Network remain flexible in responding to the problems clients are facing.

The prioritization of challenges has changed as the economic environment and the manufacturing landscape has changed. Some of the challenges have been consistent (such as continuous improvement and product development), while others have become increasingly important over time. The most significant changes to client responses focus on the issue of employee recruitment and retention. Over the past 10 years, the share of MEP clients reporting this as a challenge has nearly tripled and is now the second most frequently reported challenge companies are facing.

Manufacturer's Challenges: 10-year shifts

  • Ongoing continuous improvement and cost reduction

    • These issues remain the most frequently cited challenge by MEP clients after 10 years, although the percentage of respondents reporting this challenge has dipped from 71.9% to 67.2%.

  • Identifying growth opportunities

    • Reported by less than half the companies in FY2018, which represents a drop of about 12 percentage points compared to FY2009. Helping companies grow is the third most common challenge cited in FY2018.

  • Technology needs and managing partners and suppliers

    • Two challenges that are now more frequently cited in FY2018 compared to FY2009. While both challenges are being reported by about 16% of clients, the change from FY2009 is significant. These shifts reflect the changing market conditions and competitive environment.

  • Innovation/product development

    • Remained a consistent challenge for MEP clients. The share of clients citing innovation/product development declined by 4 percentage points between FY2009 and FY2018. About 41% of companies reported the challenge in FY2018, while 45% reported the challenge in FY2009.

  • Financing and sustainability

    • Both fell as important challenges over time. They fell by more than 6 percentage points between FY2009 and FY2018. The financing shift may reflect the improving economic conditions nationally coming out of the recession, which would mean easier access to capital and financing.

  • Exporting

    • Remains the least cited challenge and was reported by only 6% of respondents in FY2018 versus 8% of respondents in FY2009.

Data and Trends

NIST MEP has a unique position in the Federal Government that allows for collection and feedback analysis directly from clients served by the MEP National Network. This provides the Program with a wealth of information that helps guide its approaches to serving the U.S. manufacturing industry, both now and in the future. So, as we enter the new year, it is important to take a step back and look at what MEP Center clients are telling us. Being responsive to the needs of U.S. manufacturers and helping mitigate their challenges is one of the reasons the Program is around. Integrating this client feedback so that MEP Centers may help their clients proactively prepare for future challenges is important.


NOTE: The challenges question is limited by not being customized to fit different manufacturing subsectors and having pre-selected answer choices, and that it is just a piece of the larger puzzle of manufacturer needs, so to speak. However, the more that puzzle can be completed, the better MEP will all be able to strengthen and empower U.S. manufacturers.

* Founded in 1988, the Hollings Manufacturing Extension Partnership (MEP) is based at the National Institute of Standards and Technology (NIST). MEP is a public-private partnership with centers located in all 50 states and Puerto Rico, and its over 1,300 manufacturing experts at over 400 service locations, provide any U.S. manufacturer with access to resources they need to succeed.

NIST MEP's mission is to enhance the productivity and technological performance of U.S. manufacturing.

The National Institute of Standards and Technology (NIST) was founded in 1901 and is now part of the U.S. Department of Commerce. NIST is one of the nation's oldest physical science laboratories. Congress established the agency to remove a major challenge to U.S. industrial competitiveness at the time — a second-rate measurement infrastructure that lagged behind the capabilities of the United Kingdom, Germany, and other economic rivals

From the smart electric power grid and electronic health records to atomic clocks, advanced nanomaterials, and computer chips, innumerable products and services rely in some way on technology, measurement, and standards provided by the National Institute of Standards and Technology.

Today, NIST measurements support the smallest of technologies to the largest and most complex of human-made creations — from nanoscale devices so tiny that tens of thousands can fit on the end of a single human hair up to earthquake-resistant skyscrapers and global communication networks.

Data and Trends and MEP National Network

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Nico Thomas By Nico Thomas
Nico Thomas is a performance analyst at NIST MEP, working with the Program Evaluation and Economic Research group to help provide tools and information to maximize U.S. manufacturing competitiveness.

manufacturing, manufacturer, Growth, technology, best practices

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