Each year Grant Thornton (accountants and management consultants) surveys American manufacturers about their opinions toward a broad range of business issues facing midsize companies. This year's report focuses on several issues, including strategic planning, information technology and financial management.
A product that is good, fast and available at a desirable price is not good enough anymore. Customers now demand and expect to receive everything precisely how and when they want it at the most competitive price. This will be the driving force behind many business decisions in the next several years, according to the survey.
The survey also notes that larger industries are creating tighter, longer lasting and more demanding relationships with midsize suppliers in an effort to improve quality and keep costs down. So what is this doing to the midsize company, a category many finishing plants fall into (annual sales between $10 and $500 million)?
One area that many midsize companies are reviewing is strategic planning. The survey asked these companies what they feel is the most critical attribute to manufacturing success. Thirty-eight percent answered high-quality products, with superior customer service running a close second at 33 pct.
The survey also asked the companies to list their priorities for strategic planning. Ninety-five percent of the midsize companies plan to meet with their major customers to discuss ways of maximizing their value to that customer. Other strategies companies planned to implement included setting aside time for reviewing long-term objectives; involving key suppliers in planning; developing a written strategic plan; and re-thinking production.
One area where midsize companies work with their customers is designing products. Half of those surveyed jointly design products with their customers, and 37 pct design the entire product. Working together to design the product helps the midsize manufacturing company "fit" the product to his capabilities.
One other area the survey included was investing in information technology. Fifty-two pct planned to make a significant investment in information technology in 1995. The dollar amounts companies planned to invest averaged $463,200. Most of the money was earmarked for major investments in computer hardware (62 pct).
When asked about building or relocating production facilities, 53 pct noted that they will build or relocate. The reason for this was to move closer to customers. However, several cited that the move would help lower costs, provide them with a better labor pool, and lower taxes. The biggest tax burden for most midsize companies is federal taxes.
To obtain a copy of the report so you can better compare your midsize company to others in the U.S., contact Grant Thornton LLP, Market Research Department, 605 Third Ave., New York, NY 10158, telephone 212-599-1011, fax 212-557-2764.