SMI Annual Market Summary

The Market Summary survey tracks vital statistics in all key areas of springmaking: number of plants, expenditures, sales by type of product, sales by customer classification and more.
Both members and nonmembers of SMI are invited to participate in the Market Summary survey, provided they own companies that make springs in North America for general sale.

Note: Participation is the only way to get this useful, comprehensive spring industry data for free. Participants receive not only the summary results but also individual critiques of their businesses and software tools to improve profitablity performance.
Individual company data is kept confidential.

 If you did not participate in the Market Summary and your North American company makes springs for general sale, you may order the summary results of this survey, which provides spring industry data on national levels. The cost is $50 for members and $100 for nonmembers. Please call SMI at (630) 495-8588.

Learn More About the Market Summary
Find out how you can determine an attainable profit level
for your spring company and how to get there

See key findings of the Market Summary in the article:
"The Spring Industry's High-Profit Performers: How Do They Do That?"



SMI Annual Market Summary Report

What's an Attainable Profit Level?
How Do I Get There?
By John Mackay, Mackay Research Group

Many owners of small businesses believe that they are so closely involved with all facets of their operation that there is no need to participate in an industry benchmarking study. However, if they want their company to continue to grow and increase profitability in today’s competitive environment, they must realize that sometimes even their best instincts may not be enough (and without an industry benchmark, they are only instincts). It is essential that owners and managers take the time to analyze industry best practices and build them into their company’s business plans.

The SMI Annual Market Summary report provides important financial benchmarks for spring manufacturers. The report presents insights into the performance of the typical spring company and, more importantly, profiles a high-profit group of springmakers. By examining these high-profit companies, survey participants gain an understanding of the areas in which they excel and the trade-offs they make in order to achieve their success.

According to the most recent SMI Annual Market Summary report (profiling 2004 data), the profit margin for the typical spring manufacturer nearly doubled over the previous year. As can be seen in the chart below, “high-profit” springmakers earn approximately three times more profit than the typical manufacturer in the study. The dotted line in the Profit Margin chart profiles one of every four manufacturers that make up the high-profit group in the Annual Market Summary report. If one out of four spring manufacturers can bring eleven percent to the bottom line, it should be an attainable goal for other springmakers, as well.

North American companies whose business is making springs for general sale are invited to participate in this survey. To sign up, click here.

As springmakers set their financial and performance goals, they must set them within practical and workable achievement levels. But, how do they know if their goals are practical and achievable? Using the Annual Market Summary report, they can compare their company's performance to established industry financial performance targets and analyze how "high-profit" companies in the industry achieve their success.

Simply stated, financial benchmarking with the SMI Annual Market Summary report is one of the most powerful tools available to springmakers for initiating and sustaining improved profitability… and it’s free to participants.
"Do you really know how your company is doing in these changing times? Are you leading the pack or following? SMI has the tool to answers these questions and more, objectively!"

~ Russ Bryer, Spring Team Inc., Benchmarking Committee Chair

What’s in it for SMI?

1. Design SMI members’ services to appropriately address their needs.

2. Understand the impact of legislation and regulation on SMI members’ businesses.

3. Position SMI as a proactive interface with governmental legislators.

Whoopee! So what? Who cares?

What’s in it for Me?

Every springmaker that participates in the survey will receive an individual company report, called the Financial Performance Report (FPR), which compares their company’s results to those of similar spring manufacturers. Such comparable benchmarks include not only the typical spring manufacturer’s performance but also those spring manufacturers in the same sales size category. The FPR also indicates how the participant’s company compares to the industry’s most profitable manufacturers. The FPR provides data for more than 100 different measures, ranging from sales per employee through inventory turnover to gross margin. It also includes all key financial ratios, as well as a complete income statement and balance sheet. In order to protect participants’ confidential data, Mackay Research Group sends this report directly to each participant.

Nonparticipating North American springmakers can purchase the basic summary report only, which does not include the FPR.

Is the Annual Market Summary Report an effective tool for improving profitability?

The Annual Market Summary report can be a critical catalyst for change. It is difficult for owners, managers and their employees to dispute weak performance or inefficient processes when clear, systematic, comparative data is available. Data empowers and stimulates people to address real issues, and find solutions where results can be measured. Achieving financial success and facilitating change are two of the primary roles of executives in manufacturing. The Annual Market Summary report can be a tool to support both of these important roles.

Annual Market Summary Report Assesses What is Most Important

The Annual Market Summary Report evaluates the degree to which a business is successful. It focuses on critical financial success factors like:

· Is the company’s profit acceptable?

· Does it provide a reasonable return on the owners’ investment?

· Are the margins adequate to cover overhead?

· Are the expenses out of control?

· Is the company spending too much on direct materials or direct labor?

· Is the resulting balance sheet acceptable?

Annual Market Summary Report Challenges Long-Held Beliefs

The Annual Market Summary report provides a comprehensive and comparative evaluation of financial performance, helping to identify strengths and weaknesses. Manufacturers have a tendency to overestimate their strengths and underestimate their weaknesses. Little progress can be made when performance evaluation is left to a debate based solely on experience and subjective evidence.

The Annual Market Summary report provides credible results to guide and motivate those in a position to have the greatest impact on performance improvements. When owners and managers review the Annual Market Summary results, inevitably two types of conclusions are reached: First, some of the results reinforce what managers already believe, based on their previous experience and training. The difference is that now there is credible, comparable evidence to support what was previously opinion or supposition. Second, owners and managers are inevitably presented with results that challenge their long-held beliefs. These results are typically questioned because the evidence is contrary to long-held assumptions. Once the credibility of the results has been established, managers face the challenge of integrating this new information into their overall view of performance. These results typically have the greatest impact on the improvement of profitability.

Credible results provide evidence for managers to rethink their assumptions about strengths and weaknesses. It calls for them to incorporate new insights into a revised perspective of problems and opportunities. The Annual Market Summary results challenge managers to address their most critical financial factors.

Annual Market Summary Report Informs Decision-Making

Few businesses have unlimited resources to invest in all aspects of their operation. Each year, managers are faced with making resource-allocation decisions that will result in improved profitability. One of the major barriers is the inability of managers to shift resources from historically established operating procedures. The Annual Market Summary report can provide information that details the level of performance as well as the importance of financial factors for success. Identifying low-performance factors that have great impact on profitability allows managers to focus on deploying their resources in the most efficient and effective manner to improve those areas of weakness. It prioritizes for the decision-maker where an investment of resources will have the greatest impact on improving profitability.

Annual Market Summary Report Motivates Employees

Even the most well-intentioned employees become frustrated and discouraged when they receive little feedback regarding the impact of their efforts. The Annual Market Summary report may be used to motivate employees in four ways:

1. It reinforces performance. Evidence of good performance is an opportunity to congratulate and reward employees for a job well done. This will motivate employees to maintain and improve performance.

2. It identifies critical financial factors essential for performance improvement and provides evidence of where their efforts will have the greatest positive impact. Materials? Labor? Overhead? Each company is different. Identifying areas where their company’s performance is below that of other spring manufacturers challenges employees to improve by tapping into their competitive nature.

3. It provides meaningful performance comparisons. Comparative results with other companies in the same industry remove all doubt that it can’t be done better. With evidence that others perform at a higher level, employees typically rise to the challenge and commit themselves to improvement.

4. It provides continuous assessment. With the trend results in the Annual Market Summary report, employees come to know what needs to be improved, and recognize when and how their performance will be assessed in the future, which has proven to be a powerful motivator.

Each of the outcomes of benchmarking described above empowers owners and managers to effectively make changes in their businesses. Sound evidence from the Annual Market Summary report can be used to address the need to break from ineffective practices and to begin a process to improve profitability.

Springmakers know they need to benchmark with the SMI Annual Market Summary report, but they may be just too busy. However, if they don’t benchmark, and then implement improvements based on it, they will find themselves out of business. Then there will be plenty of time to benchmark, but it won’t matter.

The deadline for completing the SMI Annual Market Summary survey analyzing 2005 financial data was May 31, 2006. Call Mackay Research Group at (720) 890-4255 or e-mail john@mackayresearchgroup.com for more information.

John Mackay is president of Mackay Research Group, a survey research organization that specializes in profitability and compensation research for manufacturing trade associations. He can be reached by e-mail at john@mackayresearchgroup.com or by phone at (720) 890-4255.

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