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Georgia Tech
Policy Project on Industrial Modernization
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Executive Summary
Manufacturing Needs, Practices, and
Performance in Georgia, 1994 to 1998
GMEA Evaluation Working Paper: E9703
May 1997
Jan Youtie, Economic Development Institute, Georgia Institute of Technology, Atlanta, GA 30332-0640, (tel.) +1-404-894-6111,e-mail: jan.youtie@edi.gatech.edu; Philip Shapira, School of Public Policy, Georgia Institute of Technology, Atlanta, GA 30332-0345, (tel.) +1-404-894-7735, e-mail: ps25@prism.gatech.edu.
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This study, conducted as part of the assessment and evaluation process of the Georgia Manufacturing Extension Alliance, examines manufacturing needs, practices, and performance for the period 1994 to 1998. The study is based on the 1996 Georgia Manufacturing Survey. The 1996 survey went to all Georgia manufacturing firms with 10 or more employees. More than 1,000 responses were received and weighted to reflect the actual distribution of manufacturers by industry and employment size. The 1996 survey refines and repeats an earlier survey conducted in 1994.
Problems and Needs
The 1996 survey shows that human resource and manufacturing process difficulties were the two most significant problems facing Georgia manufacturers. Human resource needs for improved supervisory/team-building and technical skills outrank the need for improved basic skills (reading, match, keyboard skills). Fewer manufacturers report problems in environmental health and safety than in 1994. Smaller firms with fewer than 50 employees continue to express additional concerns about market development and financing.
Technologies and Techniques
The most commonly used technologies and techniques in the 1996 survey are PCs for nonmanufacturing functions, just-in-time practices, MRP II, preventive machine maintenance, and local area networks (LANs). Over the next two years (through to 1998), topping the list of planned technologies and techniques are data collection devices, doing business electronically, and The Internet. Use of LANs rose from 32 percent in 1994 to 51 percent in 1996. The percentage of companies registered to ISO 9000/QS-9000 certification, although still modest, tripled since 1994. Nevertheless, ISO 9000/QS-9000 had the sharpest drop in planned usage of any of the technologies and techniques presented in the survey.
Who Uses Georgia Tech?
Since 1994, 25 percent of the manufacturers surveyed received project-related assistance from Georgia Tech/EDI. By employment size, Georgia Tech/EDI project assistance continue to figure more prominently among medium-sized and larger manufacturers; however, the penetration of manufacturers in the 10-49-facility employment category is slightly higher than in 1994. Similarly, penetration of manufacturers in the electronics and instruments industry group is higher than in 1994. These differences reflect the infusion of resources into serving manufacturers in the metro Atlanta region, and the increased penetration of metro Atlanta region firms. Georgia Tech-assisted firms were more likely to use other public/non-profit and private sector assistance sources.
Benefits of Georgia Tech Assistance
Seventy percent of survey respondents served by Georgia Tech/EDI experienced some benefit. Among these customers, the most frequently reported intermediate benefits were:
These percentages are higher for customers with longer elapsed service times.
The 1996 survey allows the performance of Georgia Tech customers to be compared with non-customer controls. A model was developed to see if quantitative benefits¾ in the form of plant productivity¾ are specifically related to receipt of assistance from Georgia Tech controlling for other factors thought to influence productivity. Results of the ordinary least squares estimation indicate that Georgia Tech assistance can be linked to productivity growth. We developed a model that estimates what the value-added per worker for the average client plant would have been if it had not been a client. We estimate that Georgia Tech extension increased the value-added of the average client plant by $366,000 to $440,000 over the 1994-to-1996 period, above that of comparable non-clients.