183

0-9 37

10-49 85

50-99 30

27

# of Employees6 11 7 22

77192912

Avg Bldg Size (sf)

56,514

<10 years 53

11-25 years 73

>25 years 38

Age of Buildings

MEP Company Visitations

Room to Expand

139

Site Information

Excellent 61

Condition of Building(s)

Good 81

Average 16

Fair 5

Poor 2

<5 yrs. 79

6-10 yrs. 21

11-25 yrs. 29

>25 yrs. 28

Years in Business

Avg Jobs Added/Lost (3 yrs)

>100

Total # of Companies Interviewed*

18

The Department of Economic Development and Finance is working on the development of a private-sector, client-driven Manufacturing Extension Partnership (MEP) Center in North Dakota. This Center will be partof the national MEP network affiliated with the U.S. Department of Commerce's National Institute of Standards and Technology.

To support this initiative we've begun a market analysis of manufacturers in the state and asked them to provide input to assist in deciding the direction of the MEP.

Who Was Surveyed?

Approximately 1,085 companies were reviewed based on factors such as sales and number of employees in an attempt to prioritize businesses. Nearly 325 of these companies were selected for on-site visits from EDF and SBDC staff beginning in late January, 2000. Local developers also had the option to participate. To date, 183 of the 239 companiescontacted for interviews have been completed. The information provided in this document is a general overview of the data collected thus far. More detailed reports by region, city or topic are also available.

The Manufacturing Extension Partnership (MEP) is a partnership between federal and state organizations working together to address the needs of small- and medium-sized manufacturers.

What is the MEP?

At the heart of the system is a network of regional manufacturing extension centers established throughout the country. These centers provide direct services to manufacturers, helping them to address their most critical needs in areas such as production techniques, technology applications and business practices.

0 10 20 30 40

$ 1,000.0 - 1,499.9 M

$ 100.0 - 249.9 million

$ 2,000.0 M or more

$ 50.0 - 99.9 million

$ 0.2 - 0.4 million

$ 0.5 - 0.9 million

$ 25.0 - 49.9 million

Under $ 0.2 million

$ 5.0 - 9.9 million

$ 10.0 - 24.9 million

$ 2.5 - 4.9 million

$ 1.0 - 2.4 million

# of Companies

Gross Sales

Page 1**Counts will not always equal total interviewed. Each respondent did not answer every question.

Product/Service

Market

Industry

What Did We Learn?

Yes

No

Yes

No

<3%

<3%

3-6%

>6% 0%

EmergingGrowing

Maturing

Declining

Anticipated in next 2 years

Amount Spent on Research and Dev.

as % of Sales

Life Cycle of Primary Product

or Service

New Technology Emerging

Yes No

New Products, Services or Capabilities

Introduced in past 5 years

Comments/Conclusions

Companies were reviewed prior to the on-site survey process in an attempt to prioritize primary-sector, growing North Dakota businesses. It is, therefore, not surprising to see so few companies showing a declining product life cycle. The number of companies having introduced products in the past is almost exactly the same as those that anticipate introducing new products in the future. We can assume that new technology is not the reason behind all of these new products because there are fewer companies with a positive response to that question. Relatively little is spent on research and development, with more than half of the companies investing less than 3% of their sales on this endeavor.

NR*NR*

Company SalesMarket Share of Key

Product(s)Export Sales, as % of

Total SalesCompany's

Primary MarketExpansion Planned Within Next 3 Years

0 5 0 1 0 0

Local

Regional

National

Int'l

Increasing

Stable

Decreasing

Increasing

Stable

Decreasing

Yes

No

Increasing

No

Decreasing

ExportsStable

Comments/Conclusions

Again, due to the prioritization process, the number of companies with strictly local markets is low. It's interesting to note that the number of companies with increased sales is almost equal to the number of companies with growing and emerging product life cycles as shown in the Product/Service section of this report. While a good portion of our businesses do not export their products, the majority of those that do show either an increased or stable export market. Only 4% of the companies have decreased export sales as compared to 24% showing an increase.

Merger, Acquisition or Divestiture

Activity

Industry Production

Capacity

Competitors' Overseas

Production

Expects Adverse Fed, State or Local

Legislation

Expects Beneficial Fed, State or Local

Legislation

Increase

Stable

Decreasing

Increasing

Stable

NR*

Decreasing

Balanced

Under

Over

YesNo Yes No

Comments/Conclusions

Global competition and industry dynamics continue to be a large concern for manufacturers. Industry production is balanced for the most part. Responses from farm machinery and equipment manufacturers indicate that 44% believe production in their industry is balanced, 39% say it's under capacity and 17% say it's over capacity. To no one's surprise, manufacturers remain somewhat skeptical as to whether state, local or federal governments would or could enact changes to benefit their businesses. It is, however, encouraging to see they don't consider government to be a great adversary.

*NR = No ResponsePage 2

Management

Workforce

1 2 3 4 5 NA Avg

Availability of 24 35 29 16 10 2.59

workers in your area 21% 31% 25% 14% 9%

Quality of workers 2 16 29 42 25 3.63

in your area 2% 14% 25 % 37% 22%

Stability of 5 14 25 47 23 3.61

workforce 4% 12% 22% 41% 20%

Productivity in your 4 20 41 31 18 4.03

facility 4% 18% 36% 27% 16%

Workforce Evaluation1 - Low 5 - High

Projected Utility Needs

Barriers to Growth in Community

Projected Employment Needs

Community Might Not Be Considered for

Expansion

Increasing

Stable

Decreasing

Increase

Stable

Decreasing

Yes

NoYes

No

NR*

NR*

Comments/Conclusions

With so many expansions planned, it's interesting to note that most utility needs are expected to remain stable. Although there are barriers to growth in the majority of the communities, business leaders say there isn't any reason to think they won't be expanding in their community. The most frequently noted barrier to growth or expansion is related to labor shortages. Other factors include lack of housing, lack of land, financial problems and transportation difficulties.

NR*

NR*

Recruitment Problems

Recruitment Problems Limited

to Community

Unfilled Positions Investment in Employee Training

Increase

Stable

Decreasing

No YesNR*

Industry Stable

Increasing

Decreasing

Community

Comments/Conclusions

The number of job openings remains stable, but companies are having more trouble recruiting people for positions such as welders, machinists, production workers and engineers as well as technical and management staff. Most feel recruitment problems are limited to the community rather than the industry. Many businesses are increasing their investment in education with the majority of their training budget going into new jobs training rather than remedial training. In fact, 70 companies, 41% of those that responded to this question, said 100% of their training budget was spent on new jobs skill training.

*NR = No Response Page 3

Manufacturing Market Analysis

Page 4

0 5 10 15 20 25 30 35 40 45

Info Mgmt Systems

Electronic Commerce

Infrastructure & Impl

Knowledge Mgmt

Advertising & Promotion

Customer Analysis

Mkt & Competitor Analysis

Product Development

Market Planning

Sales & Territory Mgmt

Selling Strat/Channel Mgmt

Distribution

Environment, Health, Safety

Facility Design

Lean Manufacturing

Maintenance/Utility Mgmt

Planning/Scheduling

Procurement and Materials

Product & Process Design

Production Control

Quality Assurance

Administrative Services

Financing

Mgmt Info Analysis/Ctrls

Organization

Planning- strat/bus/op

Employee Mgmt and Relation

Job Design/Analysis

Performance Management

Recruitment/Selection

Training/Development

Counts

Rank 1 Rank 2

Rank 3 Rank 4

Rank 5

Peo

ple

Sys

tem

sM

anu

fact

uri

ng

Sys

tem

sM

anag

emen

t S

yste

ms

Mar

keti

ng

Info

rmat

ion

S

yste

ms

What is most important in terms of improvements needed to meet your company's growth plans?

Manufacturers were asked to describe their company's growth plans to identify their functional strengths and improvement areas. This table represents areas identified as most important to address in order to assist in their growth. This portion of the assessment identifies the services manufacturers require and indicates the areas upon which the North Dakota MEP should focus its efforts.