Machinery Performance Benchmarks

Machinery Manufacturer Performance Benchmarks

_____________________________________________________________________________________________________________________________________________ www.machinesitalia.org - 1 - Machinery Manufacturer Performance Benchmarks

Machinery Manufacturer Performance Benchmarks Are your machinery manufacturers operating at world-class levels? It’s an important question, the answer to which will determine whether you are getting optimum value from current vendors. To find out, though, you have to understand the productivity and profitability of these vendors’ operations — and how well their manufacturing acumen translates into improved productivity and profitability at your organization. Having the right benchmarks — Machinery Manufacturer Performance Benchmarks — against which to assess your machinery manufacturers is a huge step in evaluating equipment providers, and can also help with a critical second step: persuading your machinery manufacturers to share metrics so that you can gain insights into their ability to aid your organization. Machinery Manufacturer Performance Benchmarks explores benchmarks for all machinery manufacturers that participated in the MPI Manufacturing Study (see “Profile of Machinery Manufacturers”), and compares the benchmarks of machinery manufacturers at or near world-class manufacturing status (plants reporting “significant progress” or having “fully achieved” world-class status) against those of machinery manufacturers furthest from world-class manufacturing status (plants reporting “no progress” or “some progress” toward world-class status). The term “world-class manufacturing” has become generally well known among U.S. industry, and is typically meant to imply a level of operational excellence that provides a competitive advantage anywhere in the world. In addition to the world-class groups, you’ll find benchmarks for machinery manufacturers sorted by parent corporation revenues. Machinery Manufacturer Performance Benchmarks provides analysis and tables of data for machinery manufacturers in four categories: Human Resources: A critical issue for machinery manufacturers is their ability amid a poor economy to retain and develop the right

employees. Yet many manufacturers are not doing that, as 26% of machinery manufacturing plants report turnover of 10% or higher. Employees leaving a company, voluntarily or involuntarily, take valuable corporate knowledge with them that must be replaced, adding costs eventually passed on to equipment buyers. Not surprisingly, machinery manufacturers at or near world-class status report lower labor turnover and higher levels of training. How well are your machinery manufacturers developing their workforces? []

Operations: Four out of five machinery manufacturers have adopted lean manufacturing as their improvement approach, but many of the

concepts and tools that support lean principles are missing at these plants. That could explain why operations metrics, too, are below par at many machinery manufacturers. For example, 20% of machinery manufacturers report on-time delivery rates of 85% or worse. Similarly, many machinery manufacturers are having difficulty increasing sales per employee, output, and inventory turn rates and keeping manufacturing costs in check. How will these performances affect your equipment purchase? [Page 5]

Supply Chain: A tightly integrated supply chain can enhance a machinery manufacturer’s ability to deliver high value to your company. But

40% of machinery manufacturers indicate they have only a buy-and-sell relationship with customers, and 44% have a buy-and-sell relationship with suppliers. In addition, most machinery manufacturers faced rising costs over the past year, and they’ve been passing these on to their customers (i.e., you). Could better supply-chain partnering lower your costs? [Page 12]

Capacity/Equipment/IT: Many machinery manufacturers are still investing in their facilities, with plans to continue through the coming year.

Machinery manufacturers at or near world-class are more likely to invest at higher levels in capital equipment and process improvements, and more likely to see profitability increases because of those investments. Are your equipment providers’ investments working for your firm? [Page 17]


Human Resources Machinery manufacturers workforces have unique skills for designing and building products and managing the processes that bring those goods to market. Most machinery manufacturers recognize the importance of employees to their success, but many firms hinder their ability to satisfy customers by not satisfying employees. More than one quarter of machinery manufacturing plants (26%) report annual labor turnover of 10% or higher; the median for all machinery manufacturers is 5%. Employees leaving a company, voluntarily or involuntarily, take valuable corporate knowledge with them that must be replaced, adding costs eventually passed on to equipment buyers. Not surprisingly, machinery manufacturers at or near world-class status report labor turnover 3 percentage points lower than machinery manufacturers furthest from world-class status: 4% (median) vs. 7%. It’s seems counterintuitive that lower labor turnover rates among machinery manufacturer at or near world-class status are achieved despite paying lower hourly wages to their production employees: $15.00 (median) vs. $16.29 at machinery manufacturers furthest from world-class status. But machinery manufacturer at or near world-class provide their workforces far higher levels of training, a benefit that can be as compelling as cash: 44% train each employee annually more than 20 hours, vs. just 20% of machinery manufacturers furthest from world-class status. All machinery manufacturers surveyed by the MPI Manufacturing Study offered paid vacation days to their workforces, and most offered employees other traditional benefits, including medical benefits and review and raise programs. But machinery manufacturers at or near world-class status are more likely to offer programs that impact the productivity and quality of their workforces, operations and products, including:

Formal safety/health program (92% vs. 74% of machinery manufacturers furthest from world-class status), Formal employee training program (79% vs. 55%), Leader/supervisor development (71% vs. 55%), and Teaming/team-building practices (58% vs. 36%).

Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more What is the plant’s annual labor turnover rate for the most recent year? Median 5.0% 7.0% 4.0% 6.0% 6.0% Average 11.5% 10.4% 13.0% 13.1% 9.5% 75th Percentile 2.0% 2.0% 2.0% 2.8% 2.0% 25th Percentile 12.3% 10.0% 15.0% 10.5% 14.5% What percentage of production employees participate in empowered or self-directed work teams? 0% 27.3% 35.5% 16.7% 30.8% 25.0% 1 - 25% 29.1% 38.7% 16.7% 19.2% 41.7% 26 - 50% 12.7% 9.7% 16.7% 15.4% 8.3% 51 - 75% 12.7% 6.5% 20.8% 11.5% 8.3% 76 - 99% 10.9% 3.2% 20.8% 11.5% 12.5% 100% 7.3% 6.5% 8.3% 11.5% 4.2%


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more What are the approximate average wages for production employees (hourly rate without overtime)? Median $16.00 $16.29 $15.00 $15.98 $16.29 Average $16.99 $17.48 $16.34 $16.88 $17.27 75th Percentile $20.00 $20.00 $18.60 $20.00 $18.90 25th Percentile $14.00 $14.27 $14.00 $13.75 $15.00 What are the approximate starting wages for production employees (hourly rate without overtime)? Median $12.00 $12.00 $12.00 $11.50 $13.00 Average $12.50 $12.85 $12.02 $11.85 $13.30 75th Percentile $14.38 $15.00 $14.00 $14.25 $14.88 25th Percentile $10.00 $10.53 $10.00 $9.75 $11.18 What are the average annual hours of formal training received by each plant employee? Less than 8 hours 20.4% 30.0% 8.3% 26.9% 12.5% 8 - 20 hours 48.2% 50.0% 45.8% 38.5% 58.3% 21 - 40 hours 25.9% 13.3% 41.7% 30.8% 20.8% More than 40 hours 5.6% 6.7% 4.2% 3.9% 8.3% For the past year, how many job-related injuries and illnesses? Median 4.0 2.0 8.5 2.0 9.0 Average 11.4 6.0 18.0 4.9 18.9 75th Percentile 1.0 1.0 2.8 0.0 5.0 25th Percentile 15.5 5.0 25.0 3.5 24.3 For the past year, how many job-related injuries and illnesses resulting in lost work days? Median 1.0 1.0 1.5 1.0 2.0 Average 29.1 50.3 2.2 3.6 27.1 75th Percentile 0.0 0.0 0.0 0.0 0.5 25th Percentile 3.3 4.5 3.3 3.0 4.0


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more Which of the following human-resource practices/programs are used at this plant? (multiple responses) Paid vacation days 100.0% 100.0% 100.0% 100.0% 100.0% Paid medical benefits 89.1% 90.3% 87.5% 92.3% 87.5% Annual review and raise program 87.3% 87.1% 87.5% 88.5% 91.7% Formal safety/health program 81.8% 74.2% 91.7% 69.2% 100.0% Education reimbursements 76.4% 67.7% 87.5% 73.1% 87.5% Paid sick and/or personal days 67.3% 71.0% 62.5% 69.2% 79.2% Formal employee training program 65.5% 54.8% 79.2% 65.4% 66.7% Bonus plan 67.3% 64.5% 70.8% 57.7% 79.2% Leader/supervisor development 61.8% 54.8% 70.8% 46.2% 83.3% Teaming/team-building practices 45.5% 35.5% 58.3% 26.9% 70.8% Profit or revenue-sharing plan 40.0% 38.7% 41.7% 38.5% 50.0% Recruiting and hiring program 36.4% 32.3% 41.7% 26.9% 50.0% Apprenticeship program 23.6% 19.4% 29.2% 15.4% 37.5% Employee-ownership options 16.4% 19.4% 12.5% 19.2% 16.7% None of these 0.0% 0.0% 0.0% 0.0% 0.0%


Operations The core of any manufacturing operation is its ability to accurately and swiftly satisfy customer demand with high-quality products in a cost-efficient, increasingly productive manner. For industrial equipment providers, that combination of goals often creates competing interests as delighted customers could mean excessive production costs. Many machinery manufacturers deal quite well with this balance, while others have trouble hitting these goals consistently. Stable operations today demand a clear path for improving and satisfying customers. For 80% of machinery manufacturers, that path has been the adoption of lean manufacturing as their improvement approach; 96% of machinery manufacturers at or near world-class status have adopted lean. But as in other industries, many of the concepts and tools that support lean manufacturing principles are missing, even among so-called lean plants, including:

Value-stream mapping (7% of all machinery manufacturers and 9% of machinery manufacturers that report using lean manufacturing), Kaizen events/blitzes (9% and 11%), and Waste elimination techniques (13% and 14%).

Even among plants at or near world-class status, adoption rates of lean concepts are only modestly higher. So while your machinery manufacturers may be on a lean journey, for many the journey may have just begun and they have miles to go before you see any impact. Four measures of plant operations are particularly useful in understanding a machinery manufacturer’s success in satisfying customers while maintaining stable business performance — sales per employee, manufacturing costs, inventory turn rates, and output. Sales per employee was $300,000 (median) at machinery manufacturers at or near world-class status vs. $214,285 at machinery manufacturers furthest from world-class status. (Imagine how that extra cash per employee can be wielded to improve a manufacturer’s ability to please customers.) More than one-quarter of machinery manufacturers at or near world-class status (26%) report that sales per employee increased by 10% or more in the past year, vs. just 12% of machinery manufacturers furthest from world-class status. While material costs can be variable, due to economic conditions and/or the type of goods being purchased and products being sold, remaining manufacturing costs (on a per-unit basis) is a measure that reveals a machinery manufacturer’s ability to manage its operations. Approximately 55% of manufacturers at or near world-class status report that they have decreased per-unit manufacturing costs (excluding purchased materials) over the past three years, compared to just 36% of manufacturers furthest from world-class status; 12% of machinery manufacturers furthest from world-class status have seen per-unit manufacturing costs increase by more than 10%. In concert with manufacturing costs are machinery manufacturers’ abilities to manage inventories in a lean manner: just enough buffer or safety stock to safeguard customer deliveries, but not bloated inventories that eat up cash flow and run the risk of becoming obsolete. Machinery manufacturers at or near world-class status are more likely to report higher inventory turns for raw material, work-in-process, and finished goods; both groups report median 8 turns of total inventory per year. Two-thirds of machinery manufacturers at or near world-class status (65%) report that turns increased over the past three years compared to just 46% of machinery manufacturers furthest from world-class status.


Lastly, production output is a clear signal that a machinery manufacturer offers goods desired by customers. Half of machinery manufacturers (51%) report that total units of production increased over the past 12 months, a figure comparable between those plants at or near world-class status and those furthest from world-class. Yet 21% of machinery manufacturers at or near world-class status report that output increased by more than 20% (vs. 10% of machinery manufacturers furthest from world-class status) Operations metrics at many machinery manufacturers are respectable, and some firms clearly have high-performing operations. Yet other equipment plants are struggling to hit key metrics:

20% of machinery manufacturers report on-time delivery rates of 85% or worse; median of 95% on-time delivery rate for all machinery manufacturers.

11% of machinery manufacturers report scrap and rework rates (as a percentage of sales) of higher than 4%; median of 1.5% scrap and rework rate.

16% of machinery manufacturers report finished-product first-pass yield of 90% or worse; median of 97.9% finished-product first-pass yield.

Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more Please indicate which of the following improvement methodologies are followed at the plant: (multiple responses) Lean Manufacturing 80.0% 67.7% 95.8% 65.4% 95.8% Total Quality Management 34.6% 25.8% 45.8% 38.5% 33.3% Six Sigma 29.1% 16.1% 45.8% 19.2% 41.7% Theory of Constraints 23.6% 16.1% 33.3% 19.2% 29.2% Toyota Production System 21.8% 9.7% 37.5% 3.9% 45.8% Agile Manufacturing 7.3% 3.2% 12.5% 3.9% 12.5% Other methodology(ies) 18.2% 29.0% 4.2% 26.9% 12.5% No methodology 7.3% 12.9% 0.0% 7.7% 4.2% What percentage of plant processes (across all departments) have been addressed with improvement methodology(ies)? Median 50.0% 25.0% 77.5% 50.0% 50.0% Average 52.1% 36.7% 74.4% 48.4% 59.6% 75th Percentile 80.0% 50.0% 100.0% 83.8% 100.0% 25th Percentile 21.0% 17.5% 52.5% 20.0% 30.0%


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more Which of these programs and/or practices occur at this plant? (multiple responses) Continuous-improvement program 89.1% 83.9% 95.8% 92.3% 87.5% Recycling/reuse programs 56.4% 45.2% 70.8% 61.5% 58.3% Quality certifications (e.g. ISO) 54.6% 45.2% 66.7% 46.2% 66.7% Benchmarking 47.3% 38.7% 58.3% 46.2% 54.2% Environmental management 29.1% 19.4% 41.7% 26.9% 33.3% Energy management 29.1% 19.4% 41.7% 30.8% 33.3% Strategy/policy deployment 40.0% 29.0% 54.2% 30.8% 58.3% Total productive maintenance 38.2% 32.3% 45.8% 30.8% 45.8% PDCA problem-solving 41.8% 29.0% 58.3% 26.9% 62.5% Open-book management 27.3% 25.8% 29.2% 30.8% 29.2% Formal Green program/initiatives 16.4% 6.5% 29.2% 19.2% 12.5% Waste elimination (i.e., seven wastes) 12.7% 9.7% 16.7% 15.4% 12.5% Kaizen events/blitzes 9.1% 3.2% 16.7% 7.7% 12.5% Value-stream mapping 7.3% 3.2% 12.5% 7.7% 8.3% None of these 0.0% 0.0% 0.0% 0.0% 0.0% Please estimate the following operation/ production measures for your plant: Manufacturing cycle time (hours) (start of plant production to completion of primary product) Median 18 9 20 24 8 Average 103 161 51 101 48 75th Percentile 4 4 5 7 2 25th Percentile 80 200 64 80 50 Customer order lead time (days) (order-entry through production to ship for specific product) Median 16 21 15 18 15 Average 28 28 27 27 31 75th Percentile 5 5 5 9 4 25th Percentile 36 40 30 30 57


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more On-time delivery rate (% of goods delivered on time) Median 95.0% 93.5% 95.0% 95.0% 95.0% Average 91.2% 90.5% 92.0% 90.9% 91.8% 75th Percentile 97.4% 98.0% 97.0% 98.0% 97.0% 25th Percentile 90.0% 88.8% 90.0% 90.5% 87.5% Perfect delivery rate (% of goods on time, perfect quality, and to customer specifications) Median 95.0% 95.0% 95.0% 95.0% 94.5% Average 86.8% 83.4% 90.6% 88.4% 83.6% 75th Percentile 98.0% 97.5% 98.0% 98.0% 96.0% 25th Percentile 86.0% 81.3% 88.5% 86.3% 80.0% Finished-product first-pass quality yield (% of product that passes final inspection) Median 97.9% 97.0% 98.0% 96.5% 98.0% Average 94.1% 92.1% 96.7% 91.2% 97.4% 75th Percentile 99.0% 99.0% 99.0% 98.3% 99.0% 25th Percentile 94.3% 91.3% 94.3% 87.5% 96.0% Scrap and rework (as % of plant sales) Median 1.5% 1.7% 1.0% 2.0% 1.0% Average 2.9% 3.2% 2.6% 3.9% 2.3% 75th Percentile 0.8% 0.9% 0.5% 1.0% 0.4% 25th Percentile 2.0% 2.8% 2.0% 3.0% 2.0% Warranty costs (as % of plant sales) Median 1.0% 0.5% 1.0% 0.3% 1.0% Average 1.0% 0.7% 1.2% 0.7% 1.3% 75th Percentile 0.0% 0.0% 0.4% 0.0% 0.6% 25th Percentile 1.4% 1.0% 1.8% 1.0% 1.7% How has total production output (unit volume) changed in the past 12 months? Decreased more than 20% 7.3% 9.7% 4.2% 11.5% 4.2% Decreased 11 - 20% 3.6% 3.2% 4.2% 3.9% 4.2% Decreased 1 - 10% 18.2% 12.9% 25.0% 15.4% 20.8% Stayed the same 20.0% 22.6% 16.7% 15.4% 20.8% Increased 1 - 10% 20.0% 25.8% 12.5% 23.1% 20.8% Increased 11 - 20% 16.4% 16.1% 16.7% 19.2% 12.5% Increased more than 20% 14.6% 9.7% 20.8% 11.5% 16.7%


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more How have per-unit manufacturing costs, excluding purchased materials, changed in the last 3 years? Decreased more than 20% 2.1% 0.0% 4.6% 4.2% 0.0% Decreased 11 - 20% 12.8% 4.0% 22.7% 0.0% 23.8% Decreased 1 - 10% 29.8% 32.0% 27.3% 29.2% 33.3% Stayed the same 14.9% 16.0% 13.6% 25.0% 4.8% Increased 1 - 10% 31.9% 36.0% 27.3% 33.3% 28.6% Increased 11 - 20% 6.4% 8.0% 4.6% 4.2% 9.5% Increased more than 20% 2.1% 4.0% 0.0% 4.2% 0.0% What are the approximate sales per employee for the most recent fiscal year? Median $240,000 $214,285 $300,000 $200,000 $300,000 Average $295,535 $257,168 $355,003 $202,803 $373,530 75th Percentile $350,000 $300,000 $372,500 $271,364 $400,000 25th Percentile $133,000 $120,000 $136,183 $120,000 $196,000 How have sales per employee changed in the past year? Decreased more than 10% 6.3% 8.0% 4.4% 12.5% 0.0% Decreased 6 - 10% 10.4% 0.0% 21.7% 8.3% 9.1% Decreased 1 - 5% 6.3% 12.0% 0.0% 8.3% 4.6% Stayed the same 18.8% 24.0% 13.0% 16.7% 18.2% Increased 1 - 5% 22.9% 28.0% 17.4% 16.7% 31.8% Increased 6 - 10% 16.7% 16.0% 17.4% 20.8% 13.6% Increased more than 10% 18.8% 12.0% 26.1% 16.7% 22.7%


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more What are the plant’s costs as a percentage of costs of goods sold (COGS)? Labor Median 11.0% 13.6% 10.0% 12.8% 10.0% Average 16.1% 18.8% 12.2% 20.5% 10.7% 75th Percentile 9.5% 10.0% 6.3% 10.0% 7.6% 25th Percentile 18.5% 24.1% 13.0% 32.5% 14.3% Overhead Median 25.5% 25.0% 26.0% 24.5% 27.5% Average 30.9% 32.0% 29.4% 32.2% 30.1% 75th Percentile 18.0% 20.0% 15.0% 18.5% 18.8% 25th Percentile 45.3% 47.0% 43.0% 45.8% 42.3% Materials Median 60.0% 53.8% 60.0% 47.9% 60.0% Average 53.1% 49.2% 58.4% 47.3% 59.2% 75th Percentile 31.5% 29.5% 42.5% 26.0% 48.8% 25th Percentile 70.0% 67.5% 75.0% 68.8% 70.0% What is the plant’s cost of goods sold as a percent of plant revenue? Median 62.5% 60.8% 64.0% 62.5% 65.0% Average 62.3% 62.4% 62.1% 64.3% 61.0% 75th Percentile 50.0% 50.0% 59.3% 55.0% 50.0% 25th Percentile 75.0% 75.0% 75.0% 75.0% 75.0% Which of the following practices are used to manage inventory? (multiple responses) Just-in-time supplier deliveries 67.3% 60.7% 75.0% 65.4% 69.6% Pull systems with kanban signals 57.7% 46.4% 70.8% 34.6% 78.3% Vendor-managed or -owned inventories 50.0% 50.0% 50.0% 38.5% 69.6% Quick equipment changeovers 34.6% 17.9% 54.2% 23.1% 47.8% One-piece flow techniques 44.2% 25.0% 66.7% 11.5% 73.9% Parts/goods supermarkets 26.9% 21.4% 33.3% 19.2% 34.8% Production leveling/heijunka 26.9% 25.0% 29.2% 15.4% 43.5% RFID and computerized inventory tracking 13.5% 10.7% 16.7% 7.7% 21.7% None of these 7.7% 14.3% 0.0% 15.4% 0.0%


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more What are the plant's inventory turn rates for the following categories of material? Raw material (turns per year) (annual COGS ÷ average value of raw material on hand) Median 10.8 9.2 12.0 12.0 10.8 Average 45.9 70.1 18.0 74.4 15.1 75th Percentile 15.7 17.3 16.3 28.5 14.5 25th Percentile 4.1 4.0 6.0 4.5 4.0 Work-in-process material (turns per year) (annual COGS ÷ average value of WIP on hand) Median 15.0 12.0 21.5 13.5 21.5 Average 58.6 46.1 71.7 49.5 75.0 75th Percentile 41.0 28.2 51.8 29.6 93.8 25th Percentile 9.6 8.6 12.3 9.1 12.0 Finished goods (turns per year) (annual COGS ÷ average value of finished goods on hand) Median 15.0 13.5 15.0 15.3 14.0 Average 46.3 44.4 48.3 46.3 51.0 75th Percentile 20.0 20.7 20.0 27.7 20.0 25th Percentile 6.0 6.2 6.0 9.3 5.0 Total inventory (turns per year) (annual COGS ÷ average value of total inventory on hand) Median 8.0 8.0 8.0 8.5 8.0 Average 18.5 24.3 11.5 27.1 10.9 75th Percentile 12.6 14.0 12.4 13.5 12.7 25th Percentile 4.2 2.7 6.0 4.0 5.1 Approximately what percentage of the plant's total inventory is obsolete? Median 2.0 3.0 2.0 3.0 2.0 Average 4.0 4.0 3.9 4.0 3.8 75th Percentile 1.0 1.8 1.0 1.0 1.0 25th Percentile 5.0 5.0 5.0 5.0 5.0 How has the total inventory turn rate changed in the last three years? Decreased more than 20% 3.9% 3.6% 4.4% 8.0% 0.0% Decreased 11 - 20% 0.0% 0.0% 0.0% 0.0% 0.0% Decreased 1 - 10% 11.8% 14.3% 8.7% 16.0% 8.7% Stayed the same 29.4% 35.7% 21.7% 32.0% 26.1% Increased 1 - 10% 37.3% 39.3% 34.8% 36.0% 39.1% Increased 11 - 20% 11.8% 7.1% 17.4% 4.0% 17.4% Increased more than 20% 5.9% 0.0% 13.0% 4.0% 8.7%


Supply Chain Even the best efforts to service customers can be waylaid by poor collaboration with supply-chain partners and customers. Yet developing close, coordinated working processes among suppliers and customers is challenging, and many machinery manufacturers fail to move beyond rudimentary transactional relationships with any supplier or customer. Fully 40% of machinery manufacturers indicate they have only a “buy and sell (e.g., cost and quality focus)” relationship with customers; only 20% describe their relationship with customers as “partnership (e.g., sharing resources, intellectual property, and cost savings).” Relationships with suppliers are similarly focused on buy and sell (44%), with just 14% indicating they have a partnership with suppliers. Only 6% of machinery manufacturers have partnering relationships with both customers and suppliers (the groundwork for efficient supply chains); at the other end of the spectrum, 22% have only buy-and-sell relationships with both customers and suppliers. Many of the supply-chain best practices and programs necessary for deeper partnership relationships are missing at a majority of machinery manufacturers:

Supplier management program (in place at only 45% of machinery manufacturers). Collaborative design with customers (43%), Collaborative design with suppliers (37%), Access to customer forecasts (33%), and Kitting/preassembly for customers (28%).

Supply-chain metrics at machinery manufacturers, like production metrics, are generally respectable, but here, too, many equipment plants are struggling :

95% (median) customer retention rate for all machinery manufacturers, but 19% report retention rates of 90% or lower. 140 parts per million (median) customer reject rate for all machinery manufacturers, but 21% report reject rates of 1,000 parts per million

or higher. 7.5% (median) of products are “green” (products are recyclable/reusable) for all machinery manufacturers, but 24% report no green

products — and nearly half responding to the MPI Manufacturing Study did not answer this question, indicating that they probably don’t even track green performance.

Most machinery manufacturers have seen prices rise dramatically over the last year. For example, 96% of machinery manufacturers report that logistics/transport costs increased, and 19% indicate that transport costs rose by more than 10%. An inability to control costs is certain to make its way down the supply stream and impact product pricing. Many equipment-makers look to outsourcing as a way of managing internal costs (e.g., 78% outsource some or all of their fabrication), but the efficacy of those programs in reducing customer costs is debatable: 87% of machinery manufacturers report that the prices they charge customers rose in the past 12 months, and 15% had increased pricing by more than 10%.


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more Which of the following best describes your relationship with suppliers? Buy and sell (e.g., cost and quality focus) 44.0% 55.6% 30.4% 43.5% 41.7% Certification (e.g., broad qualifications established) 12.0% 7.4% 17.4% 4.4% 20.8% Cooperation (e.g., sharing product ideas, best practices) 30.0% 25.9% 34.8% 47.8% 16.7% Partnership (e.g., sharing resources, intellectual property, cost savings) 14.0% 11.1% 17.4% 4.4% 20.8% Which of the following best describes your relationship with customers? Buy and sell (e.g., cost and quality focus) 40.0% 44.4% 34.8% 37.5% 41.7% Certification (e.g., broad qualifications established) 12.0% 7.4% 17.4% 8.3% 16.7% Cooperation (e.g., sharing product ideas, best practices) 26.0% 29.6% 21.7% 29.2% 25.0% Partnership (e.g., sharing resources, intellectual property, cost savings) 22.0% 18.5% 26.1% 25.0% 16.7% Which of the following supply-chain programs and/or practices are in place? (multiple responses) Customer-satisfaction surveys 60.8% 55.2% 68.2% 62.5% 60.9% Certification of major suppliers 60.8% 58.6% 63.6% 54.2% 65.2% Sharing forecasts with suppliers 58.8% 62.1% 54.6% 50.0% 69.6% Supplier-management program 45.1% 41.4% 50.0% 37.5% 52.2% Collaborative design with customers 43.1% 44.8% 40.9% 50.0% 39.1% Collaborative design with suppliers 37.3% 34.5% 40.9% 33.3% 43.5% Access to customer forecasts 33.3% 41.4% 22.7% 41.7% 21.7% Kitting/preassembly for customers 27.5% 20.7% 36.4% 29.2% 30.4% None of these 13.7% 13.8% 13.6% 20.8% 8.7% Please estimate the following customer and supplier measures for your plant: Customer reject rates (parts per million) Median 140.0 25.0 355.0 25.0 484.5 Average 912.2 994.4 824.1 890.3 943.3 75th Percentile 6.5 1.0 81.3 5.0 110.0 25th Percentile 950.0 1,262.5 925.0 881.3 975.0 Customer retention rate (% customers retained from previous year) Median 95.0% 95.0% 98.0% 95.5% 95.0% Average 93.7% 91.7% 96.5% 92.3% 95.9% 75th Percentile 99.0% 98.5% 99.0% 100.0% 98.3% 25th Percentile 95.0% 92.5% 95.0% 93.8% 95.0% Green products (% of plant products recyclable/ reusable) Median 7.5 5.0 15.0 15.0 5.0 Average 27.5 20.6 37.3 28.4 26.0 75th Percentile 55.0 27.5 85.0 60.0 52.5 25th Percentile 0.8 0.0 4.3 0.0 1.5


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more Overseas sales (as % of total dollar volume) Median 10.0% 9.0% 15.0% 10.0% 17.5% Average 17.4% 15.5% 20.1% 15.5% 21.4% 75th Percentile 30.0% 28.0% 35.0% 20.0% 33.8% 25th Percentile 1.5% 0.3% 7.5% 0.0% 2.8% Imported material/components (% of dollar volume purchased outside U.S.) Median 10.0% 10.0% 9.0% 5.0% 22.5% Average 16.6% 15.8% 17.9% 13.6% 21.0% 75th Percentile 27.3% 29.3% 26.3% 15.0% 31.3% 25th Percentile 2.0% 0.0% 2.0% 0.0% 5.8% Imported material/components from China (% of dollar volume from China) Median 2.0% 2.0% 1.5% 0.0% 10.0% Average 7.3% 9.3% 4.4% 4.9% 9.3% 75th Percentile 10.0% 11.3% 9.5% 5.0% 15.0% 25th Percentile 0.0% 0.0% 0.0% 0.0% 0.0% How have the following costs (on a per unit basis) changed in the past 12 months? Price for your products Decreased more than 10% 0.0% 0.0% 0.0% 0.0% 0.0% Decreased 6 - 10% 3.7% 6.5% 0.0% 7.7% 0.0% Decreased 1 - 5% 3.7% 3.2% 4.4% 3.9% 4.2% No change 5.6% 9.7% 0.0% 7.7% 4.2% Increased 1 - 5% 50.0% 45.2% 56.5% 50.0% 50.0% Increased 6 - 10% 22.2% 19.4% 26.1% 23.1% 20.8% Increased more than 10% 14.8% 16.1% 13.0% 7.7% 20.8% Component/material cost Decreased more than 10% 0.0% 0.0% 0.0% 0.0% 0.0% Decreased 6 - 10% 1.8% 0.0% 4.2% 3.9% 0.0% Decreased 1 - 5% 3.6% 6.5% 0.0% 3.9% 4.2% No change 3.6% 6.5% 0.0% 3.9% 4.2% Increased 1 - 5% 18.2% 22.6% 12.5% 19.2% 20.8% Increased 6 - 10% 30.9% 19.4% 45.8% 30.8% 33.3% Increased more than 10% 41.8% 45.2% 37.5% 38.5% 37.5%


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more Employee wages Decreased more than 10% 0.0% 0.0% 0.0% 0.0% 0.0% Decreased 6 - 10% 0.0% 0.0% 0.0% 0.0% 0.0% Decreased 1 - 5% 1.8% 0.0% 4.2% 3.9% 0.0% No change 20.0% 22.6% 16.7% 19.2% 20.8% Increased 1 - 5% 74.6% 74.2% 75.0% 73.1% 75.0% Increased 6 - 10% 3.6% 3.2% 4.2% 3.9% 4.2% Increased more than 10% 0.0% 0.0% 0.0% 0.0% 0.0% Employee benefits Decreased more than 10% 0.0% 0.0% 0.0% 0.0% 0.0% Decreased 6 - 10% 0.0% 0.0% 0.0% 0.0% 0.0% Decreased 1 - 5% 5.5% 9.7% 0.0% 7.7% 4.2% No change 30.9% 22.6% 41.7% 26.9% 33.3% Increased 1 - 5% 27.3% 29.0% 25.0% 23.1% 25.0% Increased 6 - 10% 29.1% 29.0% 29.2% 26.9% 37.5% Increased more than 10% 7.3% 9.7% 4.2% 15.4% 0.0% Logistics/transport costs Decreased more than 10% 0.0% 0.0% 0.0% 0.0% 0.0% Decreased 6 - 10% 0.0% 0.0% 0.0% 0.0% 0.0% Decreased 1 - 5% 1.9% 0.0% 4.4% 0.0% 4.4% No change 1.9% 3.2% 0.0% 0.0% 4.4% Increased 1 - 5% 37.0% 32.3% 43.5% 46.2% 30.4% Increased 6 - 10% 40.7% 35.5% 47.8% 38.5% 39.1% Increased more than 10% 18.5% 29.0% 4.4% 15.4% 21.7% Utilities/fuel Decreased more than 10% 0.0% 0.0% 0.0% 0.0% 0.0% Decreased 6 - 10% 0.0% 0.0% 0.0% 0.0% 0.0% Decreased 1 - 5% 0.0% 0.0% 0.0% 0.0% 0.0% No change 3.7% 6.7% 0.0% 4.0% 4.2% Increased 1 - 5% 25.9% 20.0% 33.3% 24.0% 25.0% Increased 6 - 10% 42.6% 43.3% 41.7% 44.0% 41.7% Increased more than 10% 27.8% 30.0% 25.0% 28.0% 29.2% To what degree are the following activities outsourced? Fabrication All 14.6% 19.4% 8.3% 11.5% 16.7% Some 63.6% 71.0% 54.2% 73.1% 54.2% None 21.8% 9.7% 37.5% 15.4% 29.2%


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more Assembly All 0.0% 0.0% 0.0% 0.0% 0.0% Some 33.3% 26.7% 41.7% 30.8% 41.7% None 66.7% 73.3% 58.3% 69.2% 58.3% Electrical All 7.4% 6.7% 8.3% 3.9% 12.5% Some 57.4% 60.0% 54.2% 53.9% 62.5% None 35.2% 33.3% 37.5% 42.3% 25.0% Design and/or R&D All 1.9% 3.3% 0.0% 0.0% 4.2% Some 35.2% 36.7% 33.3% 42.3% 25.0% None 63.0% 60.0% 66.7% 57.7% 70.8% Maintenance/asset management All 3.7% 6.7% 0.0% 3.9% 0.0% Some 35.2% 46.7% 20.8% 34.6% 37.5% None 61.1% 46.7% 79.2% 61.5% 62.5% Information technology All 7.4% 10.0% 4.2% 15.4% 0.0% Some 50.0% 50.0% 50.0% 46.2% 58.3% None 42.6% 40.0% 45.8% 38.5% 41.7% Purchasing All 0.0% 0.0% 0.0% 0.0% 0.0% Some 9.4% 6.7% 13.0% 0.0% 17.4% None 90.6% 93.3% 87.0% 100.0% 82.6% Transportation All 46.3% 53.3% 37.5% 46.2% 45.8% Some 42.6% 36.7% 50.0% 42.3% 41.7% None 11.1% 10.0% 12.5% 11.5% 12.5% Customer service All 0.0% 0.0% 0.0% 0.0% 0.0% Some 9.3% 0.0% 20.8% 3.9% 8.3% None 90.7% 100.0% 79.2% 96.2% 91.7% Human resources management All 1.9% 3.3% 0.0% 3.9% 0.0% Some 16.7% 10.0% 25.0% 15.4% 16.7% None 81.5% 86.7% 75.0% 80.8% 83.3% Sales and marketing All 0.0% 0.0% 0.0% 0.0% 0.0% Some 25.9% 23.3% 29.2% 23.1% 29.2% None 74.1% 76.7% 70.8% 76.9% 70.8%


Capacity / Equipment / IT Machinery manufacturers aren’t afraid to invest in their facilities, spending for capital equipment (median 4% of sales), information technology (2% of sales) and process improvements (1.5% of sales). And despite the recession and tight credit affecting many firms, machinery manufacturers expect to keep investing in the coming year:

Capital equipment spending: 21% of machinery manufacturers plan to increase spending and 40% will retain current levels of investment. Information technology spending: 23% plan to increase spending, and 61% will retain current levels of investment. Process improvement initiatives: 40% plan to increase spending, and 56% will retain current levels of investment.

Machinery manufacturers at or near world-class report higher levels of investment in capital equipment and process improvements, but, more importantly, they are more likely than machinery manufacturers furthest from world-class to see a return from those investments:

Application of new capital equipment: 86% of machinery manufacturers at or near world-class status report that profitability increased due to new equipment vs. 67% of machinery manufacturers furthest from world-class status.

Implementation of new information technology: 41% of machinery manufacturers at or near world-class status report that profitability increased due to new IT vs. 20% of machinery manufacturers furthest from world-class status, and

Use of improvement methodologies: 91% of machinery manufacturers at or near world-class status report that profitability increased due to the use of improvement methodologies vs. 70% of machinery manufacturers furthest from world-class status.

These investments and improvement activities are helping machinery manufacturers leverage their facilities for profitability, especially among superior firms, as return on invested capital (ROIC) is 12% (median). Machinery manufacturers at or near world-class report ROIC of 16% vs. just 5% at machinery manufacturers furthest from world-class status. Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more What are the following investments/expenses as a percentage of plant sales, and how is that percentage likely to change next year Capital-equipment spending Median 4.0 3.0 5.0 5.0 2.5 Average 6.2 4.1 8.5 5.8 7.2 75th Percentile 6.5 5.0 9.5 10.0 5.0 25th Percentile 1.8 1.8 1.4 2.8 1.0 Anticipated change next year? Increase 21.3% 23.1% 19.1% 26.9% 16.7% Same 40.4% 46.2% 33.3% 38.5% 38.9% Decrease 38.3% 30.8% 47.6% 34.6% 44.4%


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more Information technology spending Median 2.0 2.0 1.5 2.0 1.5 Average 3.9 3.0 5.0 3.1 5.3 75th Percentile 5.0 5.0 6.0 5.0 8.0 25th Percentile 0.5 0.5 0.5 0.5 0.3 Anticipated change next year? Increase 22.7% 30.8% 11.1% 24.0% 25.0% Same 61.4% 65.4% 55.6% 72.0% 37.5% Decrease 15.9% 3.9% 33.3% 4.0% 37.5% Process improvement initiatives Median 1.5 1.0 1.8 2.0 1.0 Average 4.7 2.8 6.8 4.1 5.8 75th Percentile 5.0 5.0 7.5 5.0 3.0 25th Percentile 0.8 0.5 1.0 0.5 1.0 Anticipated change next year? Increase 40.0% 30.8% 52.6% 40.0% 35.3% Same 55.6% 69.2% 36.8% 60.0% 52.9% Decrease 4.4% 0.0% 10.5% 0.0% 11.8% Employee costs (all wages, benefits, etc.) Median 10.5 10.0 11.0 8.5 11.0 Average 15.6 15.0 16.2 17.9 13.0 75th Percentile 19.3 17.5 20.0 34.0 18.0 25th Percentile 3.4 2.5 5.0 3.6 4.0 Anticipated change next year? Increase 45.7% 50.0% 40.0% 53.9% 35.3% Same 37.0% 42.3% 30.0% 34.6% 41.2% Decrease 17.4% 7.7% 30.0% 11.5% 23.5% Utilities/energy Median 3.0 4.3 2.8 4.0 2.0 Average 5.6 6.1 5.0 6.3 4.9 75th Percentile 5.0 6.3 4.0 5.0 4.3 25th Percentile 1.0 1.0 1.6 3.0 1.0 Anticipated change next year? Increase 57.8% 62.5% 52.4% 70.8% 38.9% Same 31.1% 29.2% 33.3% 20.8% 44.4% Decrease 11.1% 8.3% 14.3% 8.3% 16.7%


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more Material and components Median 36.0 34.3 48.0 30.0 50.0 Average 37.0 35.2 39.5 30.7 44.5 75th Percentile 55.0 58.8 55.0 50.5 57.5 25th Percentile 13.0 12.3 28.0 11.0 29.0 Anticipated change next year? Increase 53.3% 60.0% 45.0% 60.0% 47.1% Same 24.4% 28.0% 20.0% 24.0% 17.7% Decrease 22.2% 12.0% 35.0% 16.0% 35.3% For which functions were major information technology applications and/or systems purchased in the past 12 months? Production 25.0% 20.7% 31.6% 28.0% 23.8% Design/development 33.3% 34.5% 31.6% 48.0% 19.1% Accounting/finance 12.5% 13.8% 10.5% 16.0% 9.5% Enterprisewide 20.8% 24.1% 15.8% 24.0% 19.1% Sales/selling 22.9% 24.1% 21.1% 28.0% 19.1% Administrative 16.7% 17.2% 15.8% 20.0% 14.3% Customer Service/support 33.3% 24.1% 47.4% 32.0% 38.1% Procurement/purchasing 14.6% 13.8% 15.8% 16.0% 14.3% Logistics and distribution 20.8% 24.1% 15.8% 12.0% 33.3% Supplier management 8.3% 6.9% 10.5% 4.0% 14.3% Other 2.1% 3.5% 0.0% 0.0% 0.0% No purchases 25.0% 24.1% 26.3% 12.0% 38.1% How did the following affect your company’s profitability in the most recent year? Use of improvement methodology(ies) Major increase 5.8% 0.0% 13.6% 8.0% 4.4% Some increase 73.1% 70.0% 77.3% 64.0% 82.6% No change 13.5% 16.7% 9.1% 20.0% 4.4% Some decrease 0.0% 0.0% 0.0% 0.0% 0.0% Major decrease 1.9% 3.3% 0.0% 4.0% 0.0% Not applicable 5.8% 10.0% 0.0% 4.0% 8.7% Application of new capital equipment Major increase 21.2% 16.7% 27.3% 28.0% 17.4% Some increase 53.9% 50.0% 59.1% 36.0% 65.2% No change 15.4% 16.7% 13.6% 20.0% 13.0% Some decrease 1.9% 3.3% 0.0% 4.0% 0.0% Major decrease 0.0% 0.0% 0.0% 0.0% 0.0% Not applicable 7.7% 13.3% 0.0% 12.0% 4.4%


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more Implementation of new IT Major increase 0.0% 0.0% 0.0% 0.0% 0.0% Some increase 28.9% 20.0% 40.9% 23.1% 34.8% No change 51.9% 56.7% 45.5% 57.7% 43.5% Some decrease 1.9% 3.3% 0.0% 3.9% 0.0% Major decrease 0.0% 0.0% 0.0% 0.0% 0.0% Not applicable 17.3% 20.0% 13.6% 15.4% 21.7% Development of new products/services Major increase 11.8% 6.7% 19.1% 16.0% 8.7% Some increase 58.8% 60.0% 57.1% 48.0% 69.6% No change 27.5% 30.0% 23.8% 32.0% 21.7% Some decrease 0.0% 0.0% 0.0% 0.0% 0.0% Major decrease 0.0% 0.0% 0.0% 0.0% 0.0% Not applicable 2.0% 3.3% 0.0% 4.0% 0.0% Investments in the workforce Major increase 1.9% 3.3% 0.0% 4.0% 0.0% Some increase 57.7% 43.3% 77.3% 44.0% 78.3% No change 36.5% 46.7% 22.7% 44.0% 21.7% Some decrease 0.0% 0.0% 0.0% 0.0% 0.0% Major decrease 1.9% 3.3% 0.0% 4.0% 0.0% Not applicable 1.9% 3.3% 0.0% 4.0% 0.0% Please estimate the following capacity/equipment measures for your plant: Production volume (as % of designed plant capacity) Median 60.0% 60.0% 62.5% 62.5% 60.0% Average 65.6% 64.3% 67.2% 65.2% 66.5% 75th Percentile 88.5% 90.0% 89.0% 81.8% 95.0% 25th Percentile 50.0% 44.0% 50.0% 50.0% 45.0% Machine availability (as % of scheduled uptime) Median 90.0% 85.0% 95.0% 84.0% 95.0% Average 85.7% 83.1% 89.1% 83.2% 88.7% 75th Percentile 95.5% 96.5% 95.8% 95.0% 97.0% 25th Percentile 80.0% 80.0% 83.5% 80.0% 82.5%


Machinery Furthest from At or Near Less than $50 million Manufacturers World-Class World-Class $50 million or more Operating equipment efficiency (% machine availability X % quality yield X % of optimal rate that equipment operates) Median 80.0% 75.0% 83.0% 85.0% 80.0% Average 76.9% 71.2% 83.5% 76.6% 77.5% 75th Percentile 90.0% 90.0% 90.5% 90.0% 84.0% 25th Percentile 72.0% 50.0% 75.0% 70.0% 75.0% Return on invested capital (net operating profit after taxes ÷ by capital invested) Median 12.0% 5.0% 16.0% 7.5% 17.0% Average 21.5% 19.4% 23.8% 15.9% 30.8% 75th Percentile 30.0% 33.0% 27.0% 27.0% 55.0% 25th Percentile 3.0% 3.0% 9.8% 3.0% 10.0%


Machinery Manufacturer Performance Benchmarks As discussed in this study, having the right benchmarks against which to assess your machinery manufacturers is a huge step in evaluating equipment providers. Machinery manufacturers at, or near world-class manufacturing status, specifically those based in Italy, display a high level of competence in the areas of Human Resource, Operations, Supply Chain, Capacity, Equipment, and Information Technology. Most machinery manufacturers recognize the importance of employees to their success, but many firms hinder their ability to satisfy customers by not satisfying employees. Machinery manufacturers at or near world-class status provide their workforces with high levels of training, which translated directly into knowledge and efficiency of customer service and maintenance representatives. This is essential when making purchasing decisions, vital to the longevity of the machinery, and irreplaceable in the case of any down time during the production process. Another reflection of world-class status is the ability to accurately and swiftly satisfy customer demand with high-quality products in a cost-efficient, increasingly productive manner. When it comes to cost efficiency, lean manufacturing is a trend growing in popularity; accordingly, 96% of machinery manufacturers at or near world-class status have adopted lean. Consequentially, these manufacturers have experienced a decrease in per-unit manufacturing costs at a rate higher than those that are further from world-class, where costs have risen by more than 10%. In unison with costs, two-thirds of machinery manufacturers at or near world-class status report that inventory turns for raw material, work-in-process, and finished goods increased over the past three years compared to less than half of machinery manufacturers furthest from world-class status. Finally, output has been a dependable indicator of success, which is supported by the fact that 21% of world class machinery makers have seen at least a 20% increase in output, whereas less than half of manufacturers furthest from world class have seen similar gains. In light of increased output, world-class brands are more likely to invest at higher levels in capital equipment and process improvements, and more likely to see further profitability increases because of those investments. Manufacturing companies that value progress in these areas when it comes to their machinery suppliers will find that Italy is crowded with world-class machinery makers. A proven record for a highly trained workforce, excellence in operations, supply chain management, and continued investment in capital equipment have supported Italy’s rich tradition in innovation and precision. For an opportunity to reap the benefits of world-class equipment, consider Italy as your next destination towards progress. Contact Machines Italia c/o the Italian Trade Commission at 1-888-ITALTRADE, or visit us at www.machinesitalia.org for more information on how Italian suppliers have lived up to the aforementioned benchmarks, and how their manufacturing acumen translates into improved productivity and profitability at your organization. Profile of Machinery Manufacturers Fifty-five machinery-manufacturing facilities participated in the MPI Manufacturing Study in late 2008 and early 2009, and they were identified by the North American Industry Classification System code (333) for “machinery manufacturing.” Approximately 83% of these machinery manufacturers were part of a private company, and 80% have been in operation for more than 20 years. The majority describes their operations as low volume/high mix. Median plant revenue is $23 million (average $142 million), and the median revenue of corporate parents is $29.5 million (average $1.43 billion). The plants are staffed by median 105 employees (average 190). Approximately 9% of machinery manufacturers indicated that they’ve made “no progress” toward world-class manufacturing status, and another 47% have made only some progress (this group is called “furthest from world-class status”). Only 4% have “fully achieved” world-class status, and


40% have made “significant progress” toward world-class status (this group is called “at or near world-class status”). In most instances, the group at or near world-class status outperforms those plants furthest from world-class status (based on “median” or typical performances for the group). Yet for some measures, this is not the case, due to the need for all machinery manufacturers to strive for continuous improvement, or, possibly, because unique factors may be at play in the data. For example, cost of goods sold (COGS) as a percentage of revenue is higher among plants furthest from world-class. But considering that plants at or near world-class status had lower labor turnover, it could be that the world-class group has tried to avoid layoffs, keep employees on the books, plan long-term, and, thus, record higher COGS in the short-term. THE ITALIAN TRADE COMMISSION AND MACHINES ITALIA THE ITALIAN TRADE COMMISSION The Italian Trade Commission (ITC) (also known as Istituto nazionale per il Commercio Estero or I.C.E.) is an Italian government agency entrusted with the promotion of trade, business development and industrial cooperation between Italian and foreign companies. It supports the internationalization of Italian firms and their consolidation in foreign markets. Getting to know the Italian market through the Italian Trade Commission Learning about Italy’s market and industries is the first step to identifying business opportunities for your company. The Italian Trade Commission, with its network of 117 offices in 87 countries around the world, provides information and assistance to foreign entities interested in establishing relationships with Italian companies. In particular, ITC provides:

• A primer on the Italian market, including information on Italian foreign trade, national trade policies, current Italian laws and regulations designed to attract foreign investments and assist foreign investors, and Italy’s economic outlook.

• Access to information on Italian companies through specialized websites dedicated to Italy’s major production sectors. • A portal to Italian companies. Foreign companies can submit offers and requests of a business development nature to a database,

broken down by sector and market, enabling Italian companies to easily access and identify new proposals. • Information on trade fairs and exhibitions held in Italy throughout the year.

MACHINES ITALIA, AN ITALIAN TRADE COMMISSION PROJECT Machines Italia was designed by the Italian Trade Commission to promote Italian-made machinery and technology to manufacturers in North America. In partnership with 14 leading Italian machinery manufacturers’ associations, Machines Italia supports numerous activities in North America, ranging from programs with academic institutions to business development for multiple machinery sectors. Machines Italia’s 14 member associations represent more than 10,000 companies. Participating industry sectors include companies involved in the production of equipment for agriculture/farm machinery; ceramics; earthmoving machinery; food technology; footwear leathergoods and tannery; foundry and metallurgical machinery; glass; marble and stone; metalworking; packaging; plastics and rubber; printing, graphic and converting; textiles; and wood.


Italy’s industrial machinery, equipment and parts industry represents a fifth of all Italian global exports, 20% of which is sent to U.S. companies and consumers annually. Many Fortune 100 companies use Italian machinery and technology – ranging from agricultural to aeronautics companies. ITALIAN MACHINERY’S COMPETITIVE ADVANTAGE “Flexibility, creativity and innovation” are the three reasons most cited by North American companies for using Italian machinery and technology.

• Flexibility: Italy is home to hundreds of small and medium manufacturing companies where company owners typically manage the day-to-day operations. This feature yields ultimate working flexibility, quick response times, and unparalleled attention to developing tailor-made solutions for customers.

• Creativity: Italians are known for their creativity – and not just in food and fashion. They hold a reputation for out-of-the-box

thinking in design and engineering. Since the days of Leonardo da Vinci, Italians have followed the guiding principle that development can only be achieved by understanding one’s needs and goals. In the manufacturing arena, this approach translates into application-specific solutions to meet customer needs.

• Innovation: The Italian heritage of innovation dates back centuries. Ingenuity and innovation continue to thrive within today’s

Italian manufacturing industry, known for its leadership in machine development, integration, and technological advancement.

North America’s best-known manufacturing giants have discovered the benefits of integrating Italian equipment into their production lines and processes. As part of a re-industrialization of local markets, Italian solution providers are helping North American manufacturers turn out viable products every day, in many cases more efficiently and competitively. This, in turn, provides economic growth and development within local economies. For other complimentary guides such as:

Expect More Value from Industrial Equipment Manufacturers Smart Capital Powerful Performance Measures Capacity Optimization and many others

CONTACT ANY OF OUR OFFICES LISTED ON THE BACK COVER

FOR ADDITIONAL INFORMATION, PLEASE CONTACT ANY OF OUR ITALIAN TRADE COMMISSION OFFICES CHICAGO C/o Italian Trade Commission 401 North Michigan Avenue, Suite 3030 Chicago, Illinois 60611 Tel.: 888-ITALTRADE (482.5872) Tel. : 312.670.4360 Fax: 312.264.6209 Email: [email protected] ATLANTA C/o Italian Trade Commission 233 Peachtree Street N.E., Suite 2301 P.O. Box 56689 Atlanta, Georgia 30303 Tel.: 888-ITALTRADE (482.5872) Tel. : 404.525.0660 Fax: 404.525.5112 Email: [email protected] LOS ANGELES C/o Italian Trade Commission 1801 Avenue of the Stars, Suite 700 Los Angeles, California 90067 Tel.: 888-ITALTRADE (482.5872) Tel. : 323.879.0950 Fax: 310.203.8335 Email: [email protected]

For an opportunity to reap the benefits of world-class equipment, consider Italy as your next destination towards progress. Contact Machines Italia c/o the Italian Trade Commission at 1-888-ITALTRADE, or visit us at www.machinesitalia.org for more information on how Italian suppliers have lived up to the aforementioned benchmarks, and how their manufacturing acumen translates into improved productivity and profitability at your organization.

MEXICO CITY C/o INSTITUTO Italiano Para El Comercio Exterior Edificio Omega – Campos Eliseos N. 345 Colonia Polanco – 11560 Mexico D.F. Toll free.:(in Mexico City) 5281.50.10 or (outside

Mexico City) 1.800.696.6032 Tel.: (+52 555) 2808425 2813950 - 2813957 Fax: (+52 555) 2802324 Email: [email protected] TORONTO C/o Italian Trade Commission 180 Dundas Street West, Suite 2002 Toronto, Ontario Canada M5G 1Z8 Toll free.: 888-ITALTRADE (482.5872) Tel.: 416.598.1566 Fax: 416.598.1610 Email: [email protected]

©2009 Manufacturing Performance Institute. This document was developed exclusively for the Italian Trade Commission and its partner associations. No use or extracts of this material may be reproduced and/or distributed without the written consent of the Italian Trade Commission. All rights reserved.

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