Wednesday, December 12, 2007

The Manufacturing Decline

Control Engineering asks the provocative question: is manufacturing in decline in the USA?

Boston, MA – The keynote address at Aberdeen’s first annual Manufacturing in the 21st Century Executive Summit served as a stronger wake-up call for attendees than the free coffee. During this session, best-selling author Michael Treacy highlighted the dramatic evolution of workplaces during the past several decades and asked the provocative question “does manufacturing even matter anymore?”
Well does it? The magazine has some answers.
Subsequent presenters, however, demonstrated that manufacturing in North America is not only relevant, but thriving.

Innovation is indeed the engine which keeps our factories running, and the transformation of raw production data into actionable business information is central to improving the performance, productivity and ultimately the productivity of any industrial endeavor. Case in point: the transformation highlighted by Juan Carlos Sol, special projects manager of Sigma/Q.

Sigma/Q, a leading provider of custom packaging products in North and Central America, recognized a need to improve the performance and return of multi-million dollar equipment within their plants while simultaneously decreasing operational costs. To accomplish this, however, the organization needed to transition to an automated data collection process without creating significant downtime. Once in place, the data could then be used effectively to drive continuous improvement and facilitate better decision making in real-time.
As per usual the answer is to work smarter and harder. Control Engineering agrees.
However, as the name implies, continuous improvement is a journey, not a destination. Even the most robust data is of little value unless that data is used to consistently measure the performance of the business. This point was reinforced by continuous improvement experts and co-presenters Richard Kunst, VP of continuous improvement for La-Z-Boy and Mariela Castano-Kunst, continuous improvement manager for Nestle Waters Canada.

“A few years ago, a case of our water would sell for around $12 - $15,” said Castano-Kunst. “This week, one of our customers will be selling two cases for $5. Change happens rapidly and the business must be equipped to react.”

To maintain profitability and competitive advantage, manufacturers need to continually challenge themselves to seek new ways to work smarter, better, and more cost-effectively. Processes must be both repeatable and sustainable to deliver the desired results. Methodologies, such as lean, six-sigma, 5S, and others truly can create a positive effect. However, even with data-centric programs such as these, the most critical success factor is properly engaging the workforce and getting them to embrace the changes such programs enforce as part of their day-to-day activities.

Kunst described how success at La-Z-Boy begins and ends with trusting and empowering employees, providing the audience with insights on team dynamics and how to best mobilize a workforce to improve the chance of successful results.

“Every workforce or team, regardless of industry, tends to share a similar composition,” said Kunst. “Twenty percent of your workers will be positive leaders, 20% will be negative leaders and the remaining 60% will be neutral and can shift from one camp to another. It’s critical that you focus your attentions on the positive leaders and leverage their enthusiasm to sway the 60%.”
So the real question is as always: do American's still have the competitive spirit that G. S. Patton described so well.
When you, here, everyone of you, were kids, you all admired the champion marble player, the fastest runner, the toughest boxer, the big league ball players, and the All-American football players. Americans love a winner. Americans will not tolerate a loser. Americans despise cowards. Americans play to win all of the time. I wouldn't give a hoot in hell for a man who lost and laughed. That's why Americans have never lost nor will ever lose a war; for the very idea of losing is hateful to an American."
Interestingly enough manufacturing represents about the same percentage of the economy as it has for the last 50 years. So output is actually increasing to match the growth of the economy. So why all the talk of decline? In a word. Jobs. We are making more stuff than ever with fewer people. Just as the mechanical revolution eliminated farming as a mass employer, automation is in the process of eliminating manufacturing as a mass employer. So the question is - what next?

As usual there is no obvious answer. It is up to you to determine where the economy will go. Your best bet? Join the enthusiastic 20%. Figure out how you can be of service and just do it.


Anonymous said...

Exactly how long have you been out of the workforce now? Your opinion is most certainly not the view of those who actually are in charge of US industrial capacity and capabilities. Have at a look at the following 2007 National Academies report entitled "Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future":

Ex Lockeed-Martin CEO Norman Augustine was the chair for the committe. Also contributing were Craig Barrett (CEO of Intel), Steven Chu (Director of LBNL), Charles Holiday (CEO Dupont), and the list goes on. I would rate their view on the matter as a bit more informed than that of a retired blogger.

Anonymous said...

Oh, I alomst forgot: This was the report that provided the proponents of ARPA-E with the necessary ammunition to create the office. You should be excited about that. If your IEC fantasy shows more than 3 neutrons you might find ARPA-E a friendly source of future funding!

M. Simon said...

I agree with Augustine.

America needs to be the best place to start a business.

It is. For now. Venture Capital is very easy to raise in America. Very easy.

We could make it better with fewer laws. Sarbanes Oxley comes to mind.

As to getting more Americans into science and math? Fat chance. Americans are not interested and no government program will change that.

What we can do is bring in talent from abroad. However, Congress in its infinite wisdom prefers that they go home once educated.

Most of the problems we have are caused by government interference with the market. I don't see a Federal program changing that.

In any case the manufacturing sector employment is declining and will continue to do so. For the reasons stated in the post. Machines are cheaper.

BTW Chat you are one of my most loyal readers. I'm honored that you think my blog is worth so much of your time.

M. Simon said...

Arpa E is not required.

The Navy is on tap for the required funds.

In addition, had the Navy not gone ahead there were a number of venture capitalists waiting in the wings with the required funds.

As I said. In America raising money for good ideas is not hard.

Let me add that a very large industrial company also approached me.

If WB-7 is successful funds will be pouring in. If it is not there is no need. I look forward to the results. Positive or negative.

al fin said...

The US Democratic Congress is trying hard to change the "opportunity society" into the "social justice society."

When that happens, all bets are off for US business, manufacturing, venture capital, and the economy period.

Anonymous said...


Economic prosperity, innovation, science & technology, and education -- they are all linked together. Some of us (very few it seems) volunteer a great deal of time and energy working to get young people (particulary women and minorities) involved in science and engineering. It's obvious that you are an experienced engineer -- now that you are retired you should consider volunteering some of your time to STEM programs that work to motivate our youth toward science and engineering. Instead of hearing you say things like "fat chance", I wish you would actually get involved.

M. Simon said...


You make better money selling stuff and managing technologists than being a technologist.

That said, I have one son who is studying electronics engineering and a daughter who is interested in being a chemist.

I will give STEM a look.