Happy New Year everybody! Now that we’re back into the swing of things, it’s time to get cracking on improving our businesses…
It’s been quite an exciting time period for New Jersey’s manufacturers. We’re experiencing some positive momentum in our industry. 2013’s last reading for the Institute for Supply Management’s monthly PMI index, which is widely viewed as the indicator for growth in our industry, was 57% (readings above 50% indicate growth). And this was the seventh consecutive month of growth! Production in our sector is forecast to keep improving as well; production is projected to increase 3.1% next year, and will be even higher in 2015 at 4.1% according to the Manufacturers Alliance for Productivity and Innovation.
While these are great steps for our industry as a whole, it also comes down to the “me factor.” We all support U.S. manufacturing and like to see positive numbers in our field, but we also want to see positive numbers for ourselves. “Is mycompany growing? Are my costs going down? Are my sales increasing? Am I becoming more profitable?”
Simply put, while the industry is improving, there’s still more work to be done so that NJ’s manufacturers can become more globally competitive. As you set your foundation for growth in 2014, consider these three critical areas:
Issue: NJ manufacturers are being challenged with rising energy costs. It’s difficult to keep energy spending in check, stay current with available technologies and remain informed about federal and state energy policy changes.
Possible Solution: Manufacturers can minimize costs by increasing their buying power. A potential program you may want to consider is the Pro-Action Energy Alliance Program. The program is designed to:
- Increase all participants buying power for electricity
- Create greater negotiating strength for members
- Help manufacturers achieve lower electricity pricing than they could on their own
Basically, Energy Alliance Program members can aggregate their energy purchases with other members to “buy in bulk” and receive wholesale pricing, thus increasing their energy purchasing volume. For more information, click here.
Issue: 95% of the world’s customers live outside the U.S. NJ manufacturers aren’t realizing the full potential of exporting. Selling your products to foreign companies is an excellent way to increase sales. However, many companies aren’t sure how to get started with exporting or overcome the anticipated challenges typically associated with exporting (language barriers, international regulations, receiving payment, etc.)
Possible Solution: ExporTech™ is a program designed to provide hands-on coaching to NJ manufacturers looking to export. Recognized exporting experts directly engage with participants to develop a strategic and organized plan to select international business partners. Through multiple, personalized workshops, manufacturers leave with a specific plan to drive international sales. Click here for more information.
Lean Six Sigma
Issue: Operating Lean should be a top priority for every NJ manufacturer. Mistakes in the production line lead to wasted time and money when we need to maximize productivity.
Possible Solution: Sometimes there’s a perception that Lean is just about “cutting.” Lean is really about eliminating waste, removing unnecessary steps in the production cycle and reducing excess costs. Lean Six Sigma is a powerful, flexible system that leads to a culture of continuous improvement. The goal is improve efficiency, identify and remove waste and deliver goods at a faster rate while decreasing costs. For more information about Lean Six Sigma, click here.
2014 has the potential to be an incredible year of growth for New Jersey’s manufacturers. This year, focus on reducing energy costs, introducing exporting initiatives and improving efficiencies. If you have any questions about how NJMEP can help, please contact us here.
Want to hear more about these topics? Is there another key focus area you would like us to cover in a future blog entry? Leave a comment and we’ll be sure to address your thoughts!