The American manufacturing environment remains in a strong position, even though other countries aren't doing as well. The New York Times recently reported the manufacturing industry hit a three-year high point in October, citing data from the Institute for Supply Management. This news contrasts the latest information coming out of Europe and China, where manufacturing activity has slowed.
American Companies Continue to Gain Ground
The ISM monthly report, which sets a median benchmark at 50, indicated October's number for factory reach 59. This is a nearly 3-point jump over September's figure. This is the highest level since March 2011 when the economy was coming out of the economic downturn. New orders increased last month and factories have been busy with production levels at their highest point in 10 years.
David Davis, president of Simmons Machine Tool Corp., told The Wall Street Journal, that his company is currently doing very well. The organization manufactures machine tools for railcar wheel-set maintenance, and a strong economy is likely a contributing factor for the steady number of orders. Because rail traffic is influenced by demand for products regularly transported by train, Davis expressed cautious optimism regarding the positive situation.
Construction Projects Decline
The reason for some caution on the part of those involved in the manufacturing industry and others connected via supply chains is that it's unclear whether demand will continue to grow steadily. For instance, construction firms in the U.S. decreased spending levels in September, Reuters reported. The annual rate dropped 0.4 percent to $950.9 billion, the U.S. Commerce Department indicated. This can influence companies involved in manufacturing of goods that are used in building homes and commercial spaces.
Supply Chain Management Necessary to Remain Competitive
Mitigating and managing risk involves a series of adjustments that manufacturers need to consider if they want to remain competitive in a volatile market. While the manufacturing industry is currently strong, it's difficult to predict the trajectory of the global economy, which has a significant impact on today's manufacturing organizations.
Supply chain software gives companies the chance to automate several processes that can pose a risk when mismanaged and become error-strewn. For instance, inventory and purchasing processes often involve a lot of information that can get misconstrued with manual, paper-based data capture methods. What's more, a software solution can give manufacturers real-time visibility into their supply chains, allowing for greater flexibility and agility in handling changes in demand and product movement.