Manufacturing Industry Survey Report

Manufacturing Industry
Survey Report
A Sodexo and CoreNet Global Collaboration
Trends, Priorities and Challenges in Manufacturing

2
The information and concepts contained in this document are the proprietary property of Sodexo
and CoreNet Global. As such, they cannot be reproduced or utilized without permission. ©2015
INTRODUCTION
Across the globe, the manufacturing industry is vital for
economic prosperity, contributing to exports, offering
much needed employment and ultimately increasing the
standard of living. It is an essential source of innovation
and a driver of global competitiveness, fostering research
& development and economic growth. In the United
States, every dollar spent in manufacturing adds $1.37
to the national economy, and for every 100 jobs created
in a manufacturing facility, an additional 250 jobs are
created in other sectors.1,2
In 2012, manufacturing
accounted for approximately 16% of global GDP and
14% of employment, and its importance continues to
grow.3
Despite this favorable outlook, manufacturers will face
significant challenges in the coming years. This survey
seeks to understand some of the key priorities for
manufacturers as well as their strategies for growth,
specifically with respect to capabilities, physical
resources and human capital.
RESPONDENT CHARACTERISTICS
The survey was distributed electronically to CoreNet
Global members. Only respondents who were currently
employed in the manufacturing industry could
participate, resulting in the inclusion of 41 responses.
The majority of respondents (69%) come from
North America, followed by 21% from EMEA (Europe,
the Middle East and Africa), and with only minor
representation of Asia and Australia/New Zealand (5%
each). With respect to age distribution, 48% are between
the ages of 49 and 67, and 42% between 33 and 48.
Two-thirds of respondents are male, roughly reflecting
the gender distribution in the manufacturing workforce.4
The most prevalent industry sectors are furniture,
textile and food manufacturing, contributing 15.8% of
respondents each. 74% of respondents come from mid-
to large-size companies between 10,001 and 100,000
employees. Most are active in the operational and
facilities area (42%), though representatives also come
from the C-Suite (16%) and support functions (11%).
This is complemented by the self-reported decision-
making authority of respondents: 42% stated that they
have a lot of authority, 37% have some, 21% have none
and 0% have full authority.
ORGANIZATIONAL PRIORITIES IN
MANUFACTURING
Respondents were asked to select industry trends
that have had an impact on their organization (Figure
1). The top trend identified was clean energy and
sustainability concerns. The U.S. Energy Information
Administration has estimated that, by 2035, world
energy consumption will more than double compared
to 1990. With continuous population growth and
industrialization, the demand for — and cost of —
energy will increase even further, raising significant
concerns about the environmental impact and
sustainability.5
Developed and developing nations will
seek to implement competitive energy policies to provide
affordable, reliable and long-term energy access to fuel
growth. The development of such policies highlights
the importance of this trend, while simultaneously
demonstrating the necessity for the manufacturing
industry to collaborate with policymakers.
Figure 1: Rate the impact these industry trends have had on your organization
Clean Energy and Sustainability Concerns
Innovation Around New Products/Processes
Increased Use of Advanced Manufacturing Technologies
Globalization (Exporting Goods to Increase Market Share)
Policy Issues (Trade, Tax, Labor, Energy, Education)
Talent Shortage/Skills Gap
Materials Competition and Scarcity
Outsourcing Labor and Production
Issues Around the Image Value of Manufacturing Work
Re-shoring (Bringing Jobs Back to the U.S.)
1 = signiﬁcant impact, 2 = moderate impact, 3 = not sure, 4 = slight impact, 5 = no impact
0 1 2 3 4
1.65
1.78
1.79
1.88
2.00
2.04
2.38
2.42
2.70
3.29

3
Innovation around new products and services
closely follows clean energy as a second important
trend in the manufacturing industry. In fact, from
2006 to 2010, manufacturing companies that were
considered to be innovative grew their net income and
market capitalization over two times faster than those
companies that were considered less innovative.5
In the
21st
century manufacturing environment, the ability to
innovate and deliver these products and services to a
global market is essential.
Other top trends include the increased use of advanced
manufacturing technology, which is closely related
to a skills shortage and other workforce issues, as well
as globalization, which includes exporting goods to
increase market share.
Interestingly, talent shortage and skills gap were
considered to have only a moderate to neutral
impact on manufacturing organizations, and the
related issue surrounding the (negative) image value
of manufacturing work was labeled as an even less
impactful trend.
The manufacturing environment is highly competitive.
When asked to rate the importance of capabilities as
they relate to their organization’s competitiveness
(Figure 2), respondents indicated that the most
important elements were delivery and quality.
Products must be delivered in a reliable (on time) and
fast (short lead time) manner, and products must meet
high-quality and performance standards. These two
elements were followed closely by service – the ability
to maintain a high level of customer satisfaction.
TRENDS AND ISSUES AROUND
RESOURCES
Against this backdrop of industry trends and
capabilities, respondents were then asked about key
issues with respect to use of resources within their
organizations (Figure 3). The top issue identified was
the cost and/or availability of raw materials or
supplies. It is not surprising that respondents reported
this issue as a top concern, as data from 2009 to
2010 show that the demand for rare earth elements
had already increased sixfold.5
In the short term,
organizations typically react to the rising scarcity
by hedging or stockpiling. In the long term, materials
resources competition will fundamentally alter resource
strategies, including catalyzing research into alternative
materials, investment in latent supply access, and the
establishment of more efficient practices surrounding
material use.
Figure 2: Rate the importance of the following capabilities as they relate to your organization’s competitiveness
0 1 2
1 = very important, 2 = somewhat important, 3 = not sure, 4 = not very important, 5 = not at all important
1.10
1.10
1.13
1.35
1.42
1.43
Delivery – Reliable (on time) and fast (short delivery lead time) delivery of products
Quality – Manufacturing products with high quality and performance standards
Service – Ability to maintain a high level of customer satisfaction
Cost – Production and distribution of the product at low cost
Innovativeness – Ability to innovate around new products and processes
Flexibility – Ability to handle volume and product mix changes
Figure 3: To what extent has your organization been faced with issues around the following aspects of its resources?
1 = very much, 2 = somewhat, 3 = not sure, 4 = not really, 5 = not at all
Cost and/or availability of raw materials or supplies
Cost and/or availability of human capital resources (labor)
Cost and/or availability of energy resources
Quality and efficiency of physical infrastructure (electricity grid, IT and telecommunications network)
Quality and efficiency of logistical components (roads, airports, railroad networks)
Quality and efficiency of production spaces and equipment/technologies
0 1 2 3
2.09
2.23
2.50
2.64
2.68
2.68

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Concerns about raw materials were closely followed
by concerns surrounding the availability of human
capital resources (labor). Attracting and retaining
talented human capital may very well become the
most critical resource differentiating the success and
prosperity of manufacturing organizations.
According to respondents, issues surrounding physical
infrastructure, logistical components and production
spaces were considered less important topics related to
their organization’s use of resources. While investment
in infrastructure may not directly lead to best-in-class
manufacturing, a lack of infrastructure or consistent
outdating and decay thereof can turn into serious
impediments. These types of infrastructure obstacles
may become increasingly important, since emerging
economies are investing heavily in infrastructure in
order to attract attention as a potential location for
multinational organizations. As this activity continues,
developed nations and organizations must continue
reinvestment in their own infrastructure in order to
keep pace.
When asked about steps that have already been
taken to improve their organization’s competitiveness
with respect to resources (Figure 4), the two most
prevalent strategies were improving supply chain
management (85.7%) and implementing energy-
efficient initiatives (81.0%). Manufacturers have
also attempted to update or modernize logistical
components (66.7%), production spaces and equipment
(66.7%), and physical infrastructure (61.9%). Only
about half of respondents (52.4%) indicated outsourcing
work to reduce labor costs, and only 33% indicated
importing raw materials.
The responses to this question are interesting when
compared to what respondents said their organizations
intend to do in the future (Figure 4). Improving supply
chain management remains the focus (75%). At the
same time, outsourcing and updating production
spaces will likely increase in importance, as they were
ranked equally with energy-efficiency initiatives by
65% of respondents.
Updating the physical infrastructure will remain a
strategy for 60% of respondents, while only half
indicated intent to update the logistical components
for which they are in control. Importing raw materials,
mentioned by only 35% of respondents, will remain the
least prominent effort at improving competitiveness.
Figure 4. Steps to improve your organization’s competitiveness with regard to its resources
0% 20% 40% 60% 80% 100%
Updating/Modernizing Our Physical Infrastructure
Updating/Modernizing Any Logistical Components That We Are in Control of
Updating/Modernizing Production Spaces and Equipment/Technologies
Outsourcing Some of Our Work to Reduce Labor Costs
Implementing Energy Efficiency Initiatives
Improving Our Supply Chain Management
Importing Raw Materials, Supplies, or Energy Resources
50.0%
66.7%
60.0%
61.9%
65.0%
66.7%
65.0%
52.4%
65.0%
81.0%
75.0%
85.7%
35.0%
33.3%
Steps We Intend to Take
Steps We Have Already Taken

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HUMAN CAPITAL TRENDS AND ISSUES
It is well known that the manufacturing industry, like
many others, is facing significant talent and workforce
issues. In the U.S. alone, over the next decade it is
expected that nearly 3.5 million jobs will become
available in manufacturing, and 2 million of these jobs
will remain unfilled.6
Globally, currently an estimated 10
million jobs with manufacturing organizations cannot be
filled due to a growing skills gap,5
and this is not likely to
improve in the near future.
Despite the high unemployment rate in many
developed economies, companies are struggling to
fill manufacturing jobs with the right talent. Those
organizations that do manage to attract, develop and
retain much-needed scientists, engineers and skilled
production workers will have a distinct competitive
advantage.
Figure 5. To what extent has your organization been faced with the following talent shortage issues?
Figure 6. Steps to reduce the talent shortage
0 1 2 3 4
2.48
2.62
3.05
3.24
3.29
Shortage of Available, Skilled Production Workers
Shortage of Available, Skilled Knowledge Workers (Researchers, Scientists, Engineers)
Difficulties Attracting Younger Workers and Recent Graduates to the Industry
Due to the Negative Image Value of Manufacturing Work
Difficulties Attracting Skilled Workers to the Industry Due
to the Negative Image Value of Manufacturing Work
Difficulties Attracting Women to the Industry Due to
the Negative Image Value of Manufacturing Work
0% 20% 40% 60% 80% 100%
Strategies/Campaigns Specifically to Attract Women to the Industry
Strategies/Campaigns Specifically to Attract Younger Workers or Recent Graduates (e.g., Working
with College Career Centers, Inviting Students to Tour the Facility, Offering Internship Programs)
Improvements to Our Employee Value Proposition (Pay, Benefits, Opportunities
for Advancement) to Attract New Talentattract New Talent
Physical Improvements to Our Facility That Make it a More Attractive Place to Work
PR/Media Strategies to Improve the Image Value of Our Organization and/or the Industry
71.4%
75.0%
35.7%
18.8%
64.3%
68.8%
50.0%
43.8%
50.0%
43.8%

6
Within the broader issue of the talent shortage, the
most significant issue faced by organizations, according
to respondents, revolves around the shortage of skilled
workers – in production as well as knowledge sectors
(Figure 5). In contrast, difficulties in attracting younger
workers and women, or difficulties resulting from the
negative image value of manufacturing, were rated as
less important issues.
To alleviate the talent shortage, the majority (75%)
of respondents indicated that their organization has
undertaken strategies to attract recent graduates
and young workers (Figure 6). Nearly 69% indicated
improvements to the employee value proposition
to attract new talent, including improvements in pay,
benefits and advancement opportunities. These two
strategies complement each other and support the
general industry sentiment surrounding strategies to
attract younger workers.
On the other hand, only 43.8% of respondents indicated
that their organization has undertaken efforts to
improve the attractiveness of facilities and the image
value of the industry. Furthermore, only 18.8% have
taken steps to specifically attract women.
When examining what organizations intend to do in
the future, campaigns to attract younger workers
ranked as the top priority (64.3%) (Figure 6). However,
50% of respondents also say that their organizations
intend to focus more on attracting women. In fact,
efforts to attract women will be considered equally as
important as improving the employee value proposition,
a finding that supports the increasing evidence and
business case for diversity in the workforce.
At the same time, improving physical facilities (35.7%)
and using strategies to improve image value (7.1%)
were rated as the least likely actions organizations
might take to reduce the talent shortage. With the
growing shortage of workers and documented need
to attract younger employees, it nevertheless may be
important that manufacturers consider implementing
some of these lower-rated strategies. Younger workers
are often attracted to and place emphasis on their work
environment and reputation and image of their career
and employer.
In order to address the talent shortage and skills gap,
manufacturers not only have to recruit new workers,
but they must also retain and develop their existing
workforce. Accordingly, when asked about issues with
respect to the current workforce, respondents indicated
that the main issues revolve around retention and
turnover rates, as well as the fact that unskilled
workers are unable to “keep up” with advances in
new technologies (Figure 7). In contrast, worker health
and well-being were considered to be less impactful on
the current workforce, as was the lack of innovation to
drive the business.
Figure 7. With regard to your current workforce, to what extent
has your organization been challenged with the following issues?
0 1 2 3 4
Retention/Turnover Issues
Unskilled Workers Who Are Unable to Keep Up With New Technologies/Processes
Low Employee Engagement, Enthusiasm, and/or Organizational Commitment
Issues with Worker Safety
Lack of Innovation to Drive the Business
Issues with Worker Health and Well-Being
3.05
3.06
3.17
3.21
3.39
3.59

7
The respondents’ organizations have addressed
the high employee turnover and retention issues
primarily by providing programs around worker
safety and offering skills development, training
and continuing education programs (83.3%
each) (Figure 8). Two-thirds (66.7%) of respondents
also indicated the provision of on-site health and
wellness programs, as well as rewards & recognition
programs around innovation and other business
outcomes. Over half of respondents (55.6%) indicated
that their organization has undertaken efforts at
improving the employee value proposition in terms of
pay, benefits and opportunities for advancement.
Only 44.4% indicated that their organization has
attempted to improve employees’ overall quality of life.
The steps organizations intend to take in the future
show shifting priorities (Figure 8). Two-thirds (66.7%)
of respondents indicated that their organization intends
to take steps toward improving the employee value
proposition, enhancing their reward and recognition
program, and offering skill development. A smaller
portion (58.3%) indicated that their organization
intends to implement efforts to improve employees’
quality of life, safety, and health and wellness.
CONCLUSION
Manufacturing organizations are facing tight competition
in an increasingly global trading market. Pressure to
minimize costs is complicated by the struggle to find and
retain skilled human capital. This challenge is coupled
with the need for manufacturers and their employees
to continuously keep up with advancing technology and
demands for greater efficiency.
This survey showcased these issues in the
manufacturing environment and workforce, but also
found that many steps have already been taken, or will
be taken in the future, to address these prevalent issues.
The survey indicated that there is a heavy emphasis
on supply chain management and updating and
modernization strategies. At the same time, the talent
shortage is seen as a serious problem, and there is an
increasing realization of the need for recruiting talent
among younger workers and also women.
Interestingly, this survey showcased that, compared to
other strategies, there is little focus on improving the
built environment or employee well-being and quality
of life.
Millennials and Gen Y, who bring with them entirely new
expectations and needs for the workplace, are poised to
become the largest population to enter the workforce
since the Baby Boomers6
; therefore, organizations
may need to reconsider the emphasis they place
on strategies to reduce the talent shortage. More
specifically, with greater emphasis on flexibility, work-
life balance, and workplace experience, manufacturers
might want to consider utilizing the built environment
not only to attract and retain talent, but also to
increase competitiveness and foster innovation – which
respondents themselves indicated as major needs for
the industry.
Figure 8. Steps to improve issues with your current workforce
0% 20% 40% 60% 80% 100%
Improving the Employee Value Proposition (Pay, Beneﬁts, Opportunities for Advancement)
Improving Employees’ Overall Quality of Life (e.g., Improved Café Spaces or Break
Rooms, Flexible Work Arrangements/Scheduling)
Programs Around Worker Safety
On-site Health and Wellness Programs For Employees
Rewards and Recognition Programs (Around Innovation or Other Business Outcomes)
Offering Skill Development, Training, or Continuing Education Programs
66.7%
55.6%
44.4%
83.3%
83.3%
58.3%
58.3%
58.3%
66.7%
66.7%
66.7%
66.7%

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For more information about the survey, contact:
Lisa Herms, MSc
Research Analyst, Innovations 2 Solutions by Sodexo
Lisa.Herms@sodexo.com
Rebecca Scott, MPH
Senior Research Analyst, Innovations 2 Solutions by Sodexo
Rebecca.Scott@sodexo.com
SOURCES
1
NAM. (2015). Facts About Manufacturing.
Retrieved from http://www.nam.org/Statistics-And-Data/Facts-About-Manufacturing/Landing.aspx
2
DeVol, R., Wong, P., Bedroussian, A., Hynek, C., & Rice, D. (2009). Manufacturing 2.0: A More
Prosperous California.
Retrieved from http://www.cmta.net/pdfs/manufacturing_still_matters.pdf
3
Manyika, J., Sinclair, J., Dobbs, R., Strube, G., Rassey, L., & Mischke, J. et al. (2012). Manufacturing
the future: The next era of global growth and innovation. McKinsey.
Retrieved from http://www.mckinsey.com/insights/manufacturing/the_future_of_manufacturing
4
Bureau of Labor Statistics. (2015). Employed persons by detailed industry, sex, race, and Hispanic
or Latino ethnicity. Retrieved from http://www.bls.gov/cps/cpsaat18.htm
5
WEF. (2012). The Future of Manufacturing: Opportunities to drive economic growth. World
Economic Forum.
Retrieved from http://www3.weforum.org/docs/WEF_MOB_FutureManufacturing_Report_2012.pdf
6
Deloitte Research. (2007). Managing the Talent Crisis in Global Manufacturing: Strategies to
Attract and Engage Generation Y. Deloitte Research.
OTHER RESOURCES
For other sources of information related to this topic, see the resources below.
§§ Sodexo’s Thought Leadership Library: bit.ly/sodexothoughtleadership
§§ CoreNet Global’s Publications & Research page: https://www.corenetglobal.org/Publications/

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ABOUT SODEXO AND THE INNOVATIONS 2 SOLUTIONS (I2S) TEAM
Sodexo touches the lives of 75 million consumers in 80 countries every day. In North
America alone, we serve more than 15 million consumers at 9,000 client sites. Wherever
we work, our dedication to making every day a better day for people and organizations
comes from one goal — to positively improve Quality of Life.
Sodexo’s Innovations 2 Solutions team is comprised of research, marketing, design,
strategy and technology thought leaders. We are focused on changing the conversation
in existing and emerging markets to enhance Quality of Life.
ABOUT CORENET GLOBAL
CoreNet Global is the world’s leading association for corporate real estate (CRE) and
workplace professionals, service providers and economic developers. Over 9,000
members, who include 70% of the Fortune 100 and nearly half of the Forbes Global
2000, meet locally, globally and virtually to develop networks, share knowledge, learn
and thrive professionally.

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