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Product quality, customer service driving growth for U.S. manufacturers, says survey

Gears showing quality assurance
The survey conducted by IQMS (Paso Robles, CA) reveals that more U.S. businesses are realizing that they need to go beyond competitive pricing to compete in the global marketplace.

Product quality and high service levels are the two main factors driving growth for U.S. manufacturers, according to a new survey conducted by IQMS (Paso Robles, CA), a manufacturer of innovative enterprise resource planning software and manufacturing execution systems.

Nearly all of the 125 manufacturers participating in the online survey produce parts for Tier One original equipment manufacturers (OEMs) or Tier One suppliers to OEMs. One-third of the firms also develop products sold directly to businesses or through retailers. For each question, respondents were allowed to choose two answers.

Manufacturers were asked, “What defines your success in the eyes of customers?” Product quality was the number one answer, selected by 92% of respondents. The second most popular answer was on-time delivery, and the third most noted factor was having unique design, tooling and production capabilities. By contrast, low price only came in fourth.

“We are seeing a renaissance in U.S. manufacturing as more businesses realize that they need to go beyond competitive pricing to compete in the global market,” said Gary Nemmers, IQMS CEO. “The new survey of our manufacturing customers confirms what we have been hearing anecdotally for the last year: The most successful companies are growing their business by delivering high-quality products quickly and reliably while demonstrating the ability to adapt rapidly to changing demands.”

When asked, “What drives high levels of product quality and customer service?” 66% of participants said a business culture of excellence. Meanwhile, two other factors—workforce skills and development, and unique design, engineering and production capabilities—were equally cited by manufacturers.

The survey also asked, “What are the key elements of your operations that support product quality?” The top factor was production monitoring, which was recognized by 67% of respondents. The next three most important factors were engineering and design capabilities, process monitoring and statistical process control, and effective change control and corrective actions, in that order.

Additionally, survey participants were asked, “What value-added services do your customers value most?” The leading service was short-notice production capabilities, cited by 57% of manufacturers, while compliance and testing documentation came in a close second. Three other services were almost evenly split among participants: Assembly, electronic data interchange and supply chain integration, and detailed labeling.

“In manufacturing, we are seeing a growing recognition of ‘vendor value’ that goes beyond the physical part or device to such factors as fast delivery times, accurate documentation, efficient communications and up-to-the-moment tracking,” Nemmers observed. “Our survey highlights that these capabilities serve as key differentiators for manufacturers today and represent opportunities for companies that choose to invest in these areas in the future.”

The details of the survey are examined in a new IQMS white paper, which is available for download.

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