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The 10 Biggest Fears of Manufacturing Executives—and How to Overcome Them

Supply chain disruption continued to rank as the No. 1 risk factor among the 100 largest publicly-traded U.S. manufacturing companies in the latest BDO Manufacturing Risk Factor Report.

As in 2014, it was the first choice for 100% of responders, compared to 83% of responders in 2013.

A concern about government regulations as a risk factor was cited by all companies surveyed, putting it in a tie position as the No. 1 factor.

“Manufacturers are concerned about federal legislation interfering with their ability to run their business.”

The category with the highest increase in concern was “legal proceedings and litigation,” ranked 8th. Given the increasing enmity between the manufacturing community and federal regulators, it isn’t surprising that this risk factor was cited by 95% of companies this year, compared with just 79% in 2014 and 57% in 2013.

The category that jumped the second most was “environmental regulations, laws and liability,” tied for 5th, and cited by 96% of respondents this year vs. 87% in 2014.

The top 5 concerns were:

  1. Supply chain management
  2. Federal, state and local regulations
  3. Labor concerns, including underfunded pensions
  4. General economic conditions
  5. Commodity/raw material prices

It’s easy to see, based on these responses, that “the government isn’t making good regulations and rules that are pro-business or pro-worker,” argued Rick Schreiber, partner in manufacturing and distribution for BDO USA, the U.S. arm of the UK-based management-consulting firm.

The most practical way for manufacturers to make a difference in these and other risks, Schreiber said, is to join a trade group that tries to influence policy-making in Washington, D.C., and in state capitals. “If we really want to lobby and make an impact on environmental or other regulatory issues going forward, and reform any of them, we absolutely have to build a manufacturing army.”

He feels manufacturing CEOs could help boost public appreciation of the economic contributions of manufacturing by getting involved in annual “manufacturing days” in communities. “Among other things, that elevates the industry’s reputation among potential future workers,” Schreiber said. “And we’re going to need that talent.”

For the 2015 BDO ranking of manufacturing risks, click here.


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