2011 Manufacturing Trends Survey: One Percent Better

Pick an analysis: Either last year's responses were overly optimistic, or 2010 was better than expected or 2011 begins with very cautious optimism.

By Bob Sperber, Plant Operations Editor

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Coming into 2011, 40 percent expect their facility to increase salaries; 36 percent expect to maintain 2010 levels and only 2 percent predict a decrease.

SQF leads food safety programs
Figure 5. SalariesIn keeping with their ranking of food safety as an even stronger top priority for 2011, a greater number of respondents are implementing new food safety measures in the past year. More, in fact, than they expected to do: 70 percent said they would implement new measures in 2010 and 75 percent reported that they actually did so. Now, coming into the new year, 73 percent report plans for increasing food safety.

The specific practices they have or will implement for better sanitation or food safety:

  • More employee training (77 percent)
  • Further development of HACCP plans (61 percent)
  • Third-party verification/certification (59 percent)
  • Improved pest control (39 percent)
  • Sanitary equipment upgrades (38 percent)

A large minority, 34 percent, reported no change in practices from last year – after all, many initiatives are ongoing. Additionally, 25 percent reported various measures in open-ended responses that overwhelmingly dovetail with food safety-related certifications.

Figure 6. ProductionAmong such food safety programs, the SQF Program of the Food Marketing Institute's Safe Quality Food Institute retains the lion's share – 51 percent – of respondents citing at least one such initiative. This is in keeping with mega-retailer Walmart's mandate to have its suppliers choose a program compliant with the overarching Global Food Safety Initiative. For the other responses, see Fig. 4.

Zeroing-in on pathogens, processors were asked: "Compared to last year at this time, how concerned are you about E. coli, salmonella, listeria or other pathogens?" The results are somewhat reassuring in that 66 percent of respondents report the "same level" of concern – these worries never go away." Last year, 60 percent held that belief. About the same level of processors have less concern today than last year (16 percent vs. 15 percent last year), and fewer respondents, thankfully, answered that they are "more concerned – I think more incidents are coming." (18 percent this year vs 25 percent last year.)

On a related note, ingredient/food tracking and tracing programs are on the rise, with 81 percent of processors reporting that they have one in place, up from 76 percent last year.

Capital returning… without 'green' energy?

What might we expect plants to spend on improvements next year? Among the 71 percent with knowledge of their company's capital spending budget for 2011, 45 percent report some increase, in contrast to 39 percent last year. Leading the charge, 15 percent of respondents this year expect capital spending to rise more than 10 percent, vs. 9 percent of respondents last year.

Figure 7. FacilitiesPlants and companies are still cautious in their spending, but seem to have loosened the reins to let more capital projects through than in the darker days of 2009. When we asked whether respondents deferred capital projects in 2010, 37 percent said yes – but that was 10 percentage points fewer than those who deferred projects in 2009. Additionally, 45 percent said they did not defer projects in 2010 – 14 percent fewer than 2009. (The data do not correlate fully, but the trend is consistent.)

One area where capital spending and overall plant priorities may be in "wait and see" mode is energy conservation. We gave you eight possible answers to choose from, and nearly every one dropped by 2 or 3 percentage points – and "not a burning issue now" rose by 3 points. However, this survey was taken just before the year-end runup in oil and gasoline prices.

One of the most seemingly egregious oversights in this area is the percentage of respondents who report "negotiating with energy providers." This year, 14 percent say they are doing that vs. 20 percent a year ago. This would seem to indicate that either:

  • Energy prices aren't as high, or volatile, as consultants and suppliers would have processors believe; or
  • The need for better energy management is real, but processors do not see it; or
  • Maybe you already started this last year.

Similarly surprising/disappointing answers were given to our query on your company's "green" initiatives. Direct year-to-year comparisons are not valid, as we added "same priority" to the possible answers this year. Nevertheless, 37 percent said they're "more important" (was 69 percent last year), 5 percent said "less important" (vs. 11 percent last year) and 9 percent said "green" initiatives were "not important"(20 percent last year); 49 percent said the priority is about the same.

In conclusion, a big thank-you to this year's 425 respondents – we know this is a long and complex survey and it comes at a time of year when many people are off. And congratulations to those two of you who won our $100 American Express gift certificates; we hope it helps pay off some year-end bills.

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