This year, Oswald Companies proudly partnered with The Manufacturing Advocacy and Growth Network (MAGNET) to offer manufacturers the opportunity to participate in a 40-question survey about their businesses and the manufacturing industry. Providing an overall look at the Region’s second largest employer segment, the results benchmark growth, identify areas of concern and provide strategic direction for this important segment of the economy.
This year, more than 400 respondents, representing almost 8% of the region’s manufacturers, participated in the MAGNET Manufacturing Survey. Forty percent of the online surveys were completed by C-level executives or plant managers, indicating a very real interest in the topics covered. Representing 50 distinct industry sectors, most responding companies have been in business ten years or more.
Manufacturing continues to play an important role in Ohio’s economy. The segment holds approximately 20% of Ohio’s jobs across the state and is responsible for up to 50% of the economy in some regions. Of these companies, more than 95% have 500 or fewer employees.
Interpret the Results and the Risks
Survey results show that manufacturing continues to show positive signs of growth in productivity, innovation and technology. Concerns about cyber safety and workforce shortages also increased. These results have leaders looking for ways to manage risk.
When asked to compare 2017 revenues to 2016, 32% reported growth of 10% or more, representing a 10% increase over 2016 – 2015 comparisons. This clear indicator of growth is further illustrated by the 27.59% who reported revenue growth of more than 5%.
- While growth fuels the economy, the risk of increased competition can also increase the risk of litigation from customers
- Errors and omissions protection becomes even more important during times of growth
- The core triggers for general liability coverage may not respond if damage is not body- or property-related
More than 25% of survey respondents reported benefit in learning more about emerging technologies (robotics, automation, 3-D printing, etc.).
- Growing dependence on technology and connectivity allows cyber-attack to shut down a manufacturer
- Manufacturers have not updated controls at the same rate as other industries, like healthcare and finance
- An employee data breach of 100 employees can exceed $750,000 (Investigation, notification, fines & penalties, employee lawsuits)
Intellectual property grows more valuable as Almost 68.9% of respondents launched a new product or service in the last two years.
- Larger companies can drown smaller companies in legal fees when the smaller companies have to defend bogus infringement claims
- It is not uncommon for legal defense costs to exceed $1MIL
Twice the number of respondents, as compared to the last survey, indicated the workforce shortage will affect their bottom line.
- Lax HR procedures increase risk of litigation
- Average cost of court settlement is $250,000 with out-of-court settlements averaging $40,000. 10% of claims result in payments of more than $1MIL
- Workforce growth in 2018 is anticipated by 62% of respondents
- A lack of diverse workforces can lead to discrimination litigation
- Changing job skill requirements can result in displacements which can lead to wrongful dismissal litigation
Best Practices Protect Your Manufacturing Business
The fascinating views shared by the MAGNET Manufacturing Survey respondents give us insights into this critical component of our region’s growth. At the same time, digging beyond the raw numbers shows us that risk management applies to every aspect of growth and concern.
Oswald’s manufacturing experts understand this changing landscape and have created a specialized risk identification and treatment process built to provide clarity to manufactures on how to proactively address risk that can put future profits at stake. Our POWER process addresses the following:
Regularly review commercial insurance by benchmarking against peer groups, reviewing coverages to ensure they evolve to each carrier’s highest standards, challenging coverage exclusions as appropriate.
- Operational Risk Review
Review all aspects of operational risk including succession planning, business interruption, product liability, customer/vendor contracts, sustainability of employee benefits package and changing regulatory exposures.
- Workplace Risk Review
Review and assess employee’s worksite job environment, work conditions, current safety initiatives, documentation, processes and protocols and regulatory compliance.
- Evaluate Areas of Exposure
Identify and rank risks by severity and address resources needed address exposure gaps.
- Report to Client
Detail data-driven, quantified findings and jointly develop an annual service plan.
Our expertise in helping manufacturers manage risk and plan for the future is energy well-placed. We know that professionally managing the risks faced by today’s manufacturers is some of the most important work we do for our clients.
If you’d like to know more about the survey results or talk with an Oswald professional about your company’s manufacturing risk, contact:
Josh Fragoso, CIC, REBC
VP, Director of Sales
Note: This communication is for informational purposes only. Although every reasonable effort is made to present current and accurate information, Oswald makes no guarantees of any kind and cannot be held liable for any outdated or incorrect information. View our communications policy.