Survey Takes Pulse of Sourcing Community

MFG.com, a global online marketplace for the manufacturing community, recently released the results of its latest MFGWatch Survey. The survey, which drew participation from more than 200 purchasing professionals and engineers from all corners of the North American manufacturing industry, contained questions focusing on sourcing preferences, company growth projections, reactions to economic conditions and more.

The majority of participants (55 percent) described their companies as product designers/OEMs, while 18 percent worked for outsourced manufacturers, 11 percent described their companies as a mixture of product design and manufacture, and 16 percent described their companies as suppliers, research and development organizations or engineering support firms.

While 31 percent of respondents stated that their sourcing needs had decreased during the past year, 69 percent said they had maintained or grown their sourcing needs. Nearly half of buyers said they were in the process of looking for new suppliers. When questioned about geographical sourcing preferences, 64 percent said they preferred to source with North American manufacturers, 19 percent favored China and 7 percent favored Europe, while the remaining 10 percent turned to South America, Africa and other countries.

Although 60 percent of respondents stated that the volume of their orders (both value and quantity) had increased or remained the same, 40 percent reported a decrease in sourcing volume. The majority of those reporting an increase cited natural company growth and better savings opportunities. Reasons for sourcing volume decreases included declining demand, budget cuts, re-strategizing sourcing needs and halting new product development. Of those experiencing a decrease, 67 percent said they had not increased order frequency.

During 2009, 82 percent of respondents said they expect to maintain or grow their business, while 13 percent expect a decrease and 5 percent were unsure. The majority have postponed or cancelled major expenses, including hiring, software or upgrades, facility expansion and others. Actions taken to weather current economic conditions included layoffs (22 percent), hiring freezes (21 percent) and shortened shifts and work hours (18 percent), among other measures.