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Posted by: 13. April 2012

Survey Shows Reshoring’s Impact

 
A recent survey of job shops and contract manufacturers that are members of MFG.com, an online marketplace space for local, domestic and global manufacturing, sheds light on the state of these businesses. Among the key findings:
 
About 42 percent (41.7) answered “yes” to the question: “Has your company benefited this year from work that has been re-shored (was previously sourced to a supplier in another country)?”
 
To the question, “Are you optimistic or pessimistic about your sales and profits for 2012?” 78.3 percent answered “optimistic.”
 
Results also showed that more than half of responding companies are operating at 70 percent of capacity or better. Here’s how they answered: “At what percent of capacity is your business running this month?”
 
 10                                 2.0%
 20                                 5.7%
 30                                 6.9%
 40                                 7.7%
 50                                11.0%
 60                                17.5%
 70                                17.1%
 80                                13.4%
 90                                  9.8%
100 (at full capacity)         8.9%
 
Mitch Free, president and founder of MFG.com, notes that these responses indicate that shops are leaving a considerable amount of capacity underutilized. Nonetheless, compared to past surveys, these results suggest that shops are using a higher percentage of capacity than in previous years. 
 
Mitch also found this question and the results to be particularly interesting: “What percentage of the work in your shop right now is truly a good fit for your equipment and expertise, (the work you are most profitable at doing)?”
 
 10         2.0%
 20         1.6%
 30         1.6%
 40         3.7%
 50         7.3% 
 60         4.9% 
 70        16.3%
 80        20.7%
 90        22.4%
100       19.5%
 
Mitch explains that, when times are tough, job shops tend to take on any work that they can, thinking “Hey, work is work.” However, this may not be a good policy when economic conditions improve. Landing jobs that are the right match for their equipment and expertise (and more profitable) should become a renewed priority. As shops “get full, they need to be diligent to drain off the customers that are not a good fit and replace them with the right ones. That is how they can maximize profits and build a more-sticky customer base,” he says.
 

For full survey results, click here

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