Introduction

Introduction to Volume 1

What is a Needs Assessment?

A basic function of a manufacturing assistance program is to assess the needs of the manufacturers in its service area. A needs assessment is a primary tool for allocating manufacturing assistance program resources such as field office locations and number and expertise of staff. Unless this critical first step is done-and done well-the assistance program cannot provide its services effectively or efficiently.

Needs assessments are not only applicable in the planning stages of a program, however. They are an important component of the service package to individual manufacturers. They play a major role in post-service evaluation efforts. And information from needs assessments is often required by funding sources.

Needs can be defined as manufacturing practices that fall short of, or can be improved with reference to, a benchmark or standard. Manufacturing assistance programs typically broaden this definition to include the likelihood that their services will be used-and used effectively. The key issue is not just that a firm needs assistance, but also that it seeks or is receptive to program services.

Types of Needs Assessments

Needs assessments are conducted to determine assistance needs either at a regional level (that is, for the entire service area) or for an individual firm.

Regional-level assessments consider issues such as "what are the important industry sectors in the service area?," "are there concentrations of manufacturers in certain regions within the service area?"and "where should field offices be located?" The tools and methods for conducting these assessments are described in this volume of the Manufacturing Assistance Program Needs Assessment Guide.
Firm-level assessments are one-on-one interactions between program staff and client firms and involve such tools and methods as plant tours, on-site interviews, flow diagrams, benchmarks and other analytic techniques. These assessments, which are described in Volume 2 of the Manufacturing Assistance Program Needs Assessment Guide, are used to match program service offerings, field staff and/or referral resources to client firms based on individual firm needs.

Purpose of Regional Needs

In the past, many programs provided a broad range of services to a broad base of manufacturers throughout the state or region. Decisions about which assistance services should be allocated to which firms were not made until the field staff visited an individual firm. Sometimes program staff, drawing on experience, discovered that successful projects were based in firms with certain common characteristics. Or they recognized that particular problems and needs were common to firms of certain sizes and industry sectors. These rules of thumb were used from time to time to add or modify services.

Now some programs are using regional-level needs assessments to target their assistance services to segments of the manufacturing base in their region. A manufacturing assistance program may, for example, target:

major industry sectors
firms with certain problems or needs
regions within a service area
firms likely to use certain technologies ("technology-push" approach)
defense-dependent firms needing conversion assistance
firms likely to need and be receptive to certain services, for example heavy energy users in relation to assistance program energy audits

Using these assessments, programs can develop more efficient and effective resource allocation and service delivery plans. For example, some have decided to open specialized centers staffed by people with expertise useful to certain industry sectors, establish networks of manufacturers to address particular needs or problems and/or tailor field office staff expertise to the composition of the service area's industry base. Regional needs assessments prevent program planners with limited resources from spreading those resources too thinly.

Timing of Regional Needs

The various regional needs assessments methods and tools are used along a service delivery time continuum. This continuum consists of the following phases:

conceptualization
planning
service delivery
evaluation

Share analysis and surveys of major industry sectors are frequently used in the conceptualization phase of a manufacturing assistance program-often, to obtain program funding. Core industry analysis, while useful in this phase, is less commonly performed because of its analytic complexity.

In the program planning phase, needs surveys and cluster analysis are often used to structure service offerings, field office locations and number of staff. Regional needs assessment information can be combined with "rules of thumb" about how many manufacturers a field engineer can serve in a year to arrive at staffing levels. Examination of concentrations of key industries in the region can help program administrators match staff engineers with experience in these key industries.

Technology use surveys and advisory groups can suggest the level of service offerings that might be appropriate for the region's manufacturing base. If surveys reveal low technology-adoption rates, services could be adjusted to focus on production process issues and generic technologies.

After service delivery, historical program data and user group advice can be analyzed to fine-tune program offerings. As an assistance program compiles a record of company assessments, the results may influence how resources are allocated in the program as a whole through summaries of historical program data. If these summaries indicate that many of the firms assisted fall into a particular industry sector, the program may elect to target this industry through modified service offerings and staff additions. Although virtually every program collects activity information, few conduct in-depth analyses of historical data and use this information to adjust service offerings or resource allocations.

Document Organization

This document is organized as a resource guide for conducting manufacturing needs assessments at the regional level. Seven approaches are presented in all; these are summarized in Table 1. (The order in which these approaches are presented does not imply any sort of ranking or preference.) The discussion of each approach consists of:

a description
a statement of its use and intentions
one or more case examples showing how the approach has been used by actual manufacturing assistance programs
summary of its strengths and weaknesses
sources for more information

These discussions are followed by a section that addresses special considerations in assessing the needs of defense-related manufacturing firms.

TABLE 1. SUMMARY OF REGIONAL NEEDS ASSESSMENT APPROACHES

Approach Description Use Comments
(Strengths/Weaknesses)

1. Share and location quotient analyses Shares are number of establishments or employees in a SIC divided by total number across all industries; location quotients identify industries with larger shares than in U.S. industrial base Targets industries, federal funding proposals; most commonly used approach Easy to calculate, but relies on out-of-date data; SICs are too broad; does not provide information about needs, receptivity, industry structure

2. Core industry analysis Identifies industries making significant contributions to the economy in terms of manufacturing value added, linkages with goods producers, potential to increase exports or displace imports Targets industries to maximize economic payoff, showing relationships between suppliers and large customers, providing basis for sector- specific regional needs assessments Useful in regions dominated by a few vertically-integrated sectors; does not provide information about needs and receptivity; relies on dated information; complex to calculate

3. Cluster analysis Identifies geographic concentrations of firms in a service area Defines number, size and location of field offices within service regions; provides basis for localized regional needs assessments Provides for efficient service delivery and tailoring, but does not provide information about needs and receptivity; relies on out-of-date data; data disclosure problems at county level

4. Needs surveys Surveys firms about problems or desired functions/capabilities Suggests characteristics and size of potential client base, interest in service offerings and delivery mechanisms; federal funding proposals Surveys are costly, time-consuming, and lack information about readiness to use services

5. Technology use surveys Surveys firms about adoption of technologies and production system techniques Suggests characteristics and size of potential client base, readiness for service offerings and delivery mechanisms; federal funding proposals Lack of up-to-date benchmarks; industry-specific nature of technology use; surveys are costly, time-consuming

6. Advisory/user groups Groups of manufacturers with a common interest discussing issues Generate and react to ideas for resource allocation priorities, program offerings, delivery approaches and referral sources; providing feedback
for changed service approaches (user groups); prelude
to additional regional-level needs assessment research Helps obtain consensus and secure advocates, but potentially lacks focus and incentives for participation; results may not represent all firms in region

7. Historical program data Respond to firm requests for assistance; and compile and analyze characteristics of requesting firms, nature of problems, assistance provided and resources used Determining resource allocation strategy/targeting, program offerings, field office locations, staff skills, referral priorities and delivery approaches Directly reflects program experiences with firms, but difficult to categorize problems and assistance, representation of firm needs may be biased toward staff skills

This hypertext guide focuses on production process needs since these are central to the mission of most manufacturing assistance programs. Other functional areas-management, sales and marketing, and human resources, for example-are mentioned in the context of this focus.

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