Good News for the Manufacturing Industry

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Good News for the Manufacturing Industry

It is easy to look at the negative side of the news and think that there is nothing good happening in the world. That is because negativity and things that are out of the ordinary are much more exciting than the normal and the mundane – and yes, even the positive. That is why we would like to share some good news for the manufacturing industry. While there have been plenty of signs that manufacturing has had tough times for the last few years, there is actually plenty of cause to celebrate. The manufacturing industry had a great year in 2010. Manufacturing grew in all four quarters, according to the Manufacturers Alliance’s MAPI Survey.


The survey represents the state of the manufacturing industry in percentages. Numbers higher than 50 percent indicate growth while numbers lower than 50 percent indicate decline. In the third quarter and fourth quarter of 2010, the numbers were 77 percent and 75 percent, respectively. The fourth quarter had a small two-point decline from the third quarter, but it still posted an impressive number, considering how weak manufacturing was in 2009. Seventy-five is still far above the 50-point baseline.


The survey uncovered a challenge that could hurt manufacturing in 2011. The amount of inventory that companies have in stock is on the rise, which could mean that they are ordering too many products or their sales are slowing. Either one of those means businesses could cut their demand in 2011. Increasing inventories can’t go on forever because it would cause companies to have to drastically lower prices to get rid of their excess products or take other unprofitable measures to reduce them in a hurry. As demand falls for new inventory on the retail side, this will have an impact on the manufacturers. They would need to adjust to the smaller orders, which could mean manufacturing growth will turn to loss or stagnation in short order. Hopefully that won’t be the case, but it’s hard to tell.


However, at the moment 33.3 percent of manufacturers said they are working at the highest capacity measured in the survey: 85 percent or more. That’s higher than the historical average of 32 percent, and it’s also much better than it was a year ago. So, again, there is a good reason to be optimistic about the future of manufacturing. Whether the upturn in manufacturing is a blip or a sustained recovery, you can be ready for either eventuality if you take advantage of the right tools.


To help you keep up with sudden changes in demand, you should consider using manufacturing inventory software. With manufacturing inventory software, you can study detailed data on popular items, such as their sales history, cost to produce and storage processes. You can also automatically generate work orders from sales orders, track inventory from one location to another, and quickly reorder parts.

Be prepared for sudden rises and drops in the manufacturing industry by taking advantage of manufacturing inventory software.

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