Below, we are proud to present a guest post by Bob Aronson, Industry Director – Microsoft Dynamics Manufacturing. Bob has over 20 years of experience in the manufacturing industry and has been instrumental in driving development and execution of Microsoft’s Dynamics Manufacturing Industry strategy.
We look forward to more posts from Bob in the future, and are always open to guest posts from our readers representing the manufacturing or warehouse management industries. For guest post consideration, please feel free to contact To-Increase.
Measured on a quarter-to-quarter basis, discrete manufacturing grew at an 8% annual rate in the 3 months that ended July 2010. This growth is on top of the 5% annual growth rate in the 3 months that ended in April of 2010.
Industry Week reports predictions from the Manufacturers Alliance/MAPI stating that while positive growth in discrete manufacturing may slow, it is still likely to outperform the rest of the general economy. So what are the underlying reasons behind this? According to Daniel J. Meckstroth, Chief Economist for the MAPI the reasons could be seen as two-fold: pent-up consumer demand for durable goods (domestically and internationally) and enhanced business investments in equipment.
In terms of pent-up consumer demand, imagine walking by a store window each day and seeing the same adorable puppy. Each day, you walk by knowing that while that puppy may make your life infinitely easier (ie a new friend, a new guard) you just don’t have quite enough to support him (or her).
And then finally, that day arrives where you have just enough cash on hand to take care of this puppy today – and at least through tomorrow. And like many who have fallen for big brown eyes in the past, you walk into the pet store and scoop up your new friend almost uncontrollably – and you don’t give it a second thought.
Now – transform that adorable puppy into a durable good that will make your life infinitely easier regardless of where you live (ie a car, a washing machine). During this transformation, transfer that same feeling of pent-up ‘puppy demand’, and you have created the first reason why manufacturing is growing even if overall consumer spending is stagnant at best.
Of course, equipment to build these durable goods must be invested in to ensure this pent-up demand can be met. Here-in lies the second reason for manufacturing’s growth.
Earlier this week, Luciano did a great job with his post advising you of how to ensure your discrete manufacturing strategy is ready to grow and face the storm of demand that may soon fall upon us.
By sharing with you some of the underlying reasons behind this growth, I hope you re-read his post and take to heart his sage-like advice.
A storm of discrete manufacturing demand is just beyond the horizon.
Dig in – it’s the one we’ve been waiting for.