Capital equipment, IT investments equal profit

Few corporations are able to sustain competitiveness without investing in equipment and tools to help them achieve their goals, and glass companies are no different. National Glass Association members participating in the 2006 NGA Competitiveness Survey report that they invested a median 5 percent—average 14.7 percent—in capital equipment and median 2 percent—average 3.7 percent—in information technology in 2005. Among members in specific business lines, auto-glass firms were likely to invest more in both capital equipment and IT, based on average figures.

Approximately 35 percent of NGA members planned to increase capital spending in 2006 and 41 percent planned to maintain the same spending levels; 9 percent were planning to increase capital spending by more than 5 percent. More than one-third of NGA members, 46 percent, were likely to target their new capital equipment investments in 2006 at sales and marketing functions and 44 percent at customer service/support. One-third of auto-glass firms also were targeting the purchasing function, and 33 percent of architectural firms were targeting warehousing and logistics.



Approximately 44 percent of NGA members planned to increase IT spending in 2006 and 42 percent planned to maintain the same spending levels; 3 percent planned to increase IT spending by more than 5 percent. More than a third of NGA members will focus their IT spending on customer service/support, sales and marketing, and information systems/online functions. Approximately one-third, 35 percent, of auto-glass firms also were focusing their IT investments on purchasing and 33 percent on administration, and 38 percent of architectural firms were focusing on project management and 35 percent on finance/accounting.

The top performers among NGA members are not afraid to invest. Those members that had made either “significant progress” toward or “fully achieved” high performance spent a median 10 percent of revenue on capital equipment and 2 percent of revenue on IT; NGA members that had made either “no progress” or “some progress” toward high performance spent a median 3 percent on capital equipment and 1.5 percent on IT.

How will you focus your investments in 2007?