Five Steps to Regain Manufacturing Prowess

By August 26, 2015Globalization

Supply chains reach around the world but in this first blog, since the upcoming conference is in my home town, I am going to focus on what is going on here at home.  Reading the news  so many proclaim that American manufacturing is gone, never to return. The numbers certainly are frightening. In just the last 10 years, America has lost more than 2 million manufacturing jobs. The unemployment rate in manufacturing continues at double digits today.  This same situation is found in several countries around the world especially in Europe.

Yet other signs point to a possible resurgence.  A small trickle of manufacturing jobs are now returning to the US.  Politicians on both sides of the aisle want that trend to accelerate. Manufacturing is becoming central to the presidential election debate, and reports are daily touting even these smallest improvements.

Significant numbers of good manufacturing jobs can and will return if America takes five steps.  This blog will describe the first step.

Step 1 –  Define American manufacturing’s FUBO

The world has changed. America’s manufacturing base must make serious, fundamental changes to survive. To continue to polish the same old rules, policies, and methods will get American manufacturing nowhere.  Analyzing big data with the most sophisticated analytics software cannot possibly provide different answers if the questions remain the same.

China’s success in manufacturing is not just about low wages but rather its sheer size. Apple sourced its latest production to China not just because of labor rates but also the number of engineers that could be hired in less than a week. The same kind of ramp up would have taken a year in the US – if it could have happened at all.

The key question American manufacturers must ask is this: What is First, Unique, Best, or Only (FUBO) about American manufacturing? What can American manufacturing offer than China or other places can’t?

Trends show that high-skill, high-tech manufacturing could regain a foothold here in the US. Growing demand for alternative energy and alternative vehicles promises other opportunities for American manufacturers.

American manufacturing companies have the advantage of being closest to the world’s largest consuming nation – the US. As transportation costs continue to rise, the ability to sense and adapt to that market’s demands becomes increasingly important for competitiveness.

 

About Carol Ptak

Carol Ptak is currently a partner with the Demand Driven Institute, and was most recently at Pacific Lutheran University as Visiting Professor and Distinguished Executive in Residence. Previously, she was vice president and global industry executive for manufacturing and distribution industries at PeopleSoft where she developed the concept of demand driven manufacturing (DDM). Ms. Ptak is also a past president of APICS and has authored several books on MRP, ERP, Lean and Theory of Constraints (TOC).

One Comment

  • Jay Bitsack says:

    Hi Carol,
    I’m not so sure that using the FUBO perspective on US manufacturing is a viable approach… Why might I feel/think that way? Well, it’s because I don’t believe that it’s possible to define what US manufacturing needs to be based on where it has been in the past. As you know attempting to do so would be pretty much akin to trying to steer/navigate a boat by looking at its wake. Instead, I believe a more viable approach would be to craft a number of far-reaching future state scenarios that align with and support/enable a future-state vision for where America – as potential global leader in the social, economic, and technological arenas – needs/wants to; and what that means in terms of building and sustaining self-sufficient, world class, manufacturing competencies and capabilities.

    IF the primary purpose for America’s existence is to be a beacon of enlightened/responsible and sustainable social, economic, technological, and environmental thinking and behavior, then would make a great deal of sense begin thinking about America as a TOTAL SYSTEM that is capable of producing such output/outcomes. It’s only by way of thinking in such systemic terms that any real hope for a viable solution to what ails/challenges America’s potential for being a leading player in these critical domains.

    So, when it comes to how best one might go about building (and subsequently sustaining) world class manufacturing competencies and capabilities here in America – and doing so in the most expedient manner possible, a real possibility would be to establish close partnering relationships with leading global manufacturing companies around the world; but particularly in places such as Japan and Germany. Both countries would appear in positions where such partnering relationships could be of significant benefit. And with the proper economic incentives, having key companies setting up and operating their most advanced manufacturing operations here would establish a foundation upon which to build the necessary supporting industries and services. The model for following this path is, of course, what Toyota has accomplished here in the US. But, to my way of thinking, it’s only the tip of the iceberg when it cones what could be possible. I believe that by following this route, other doors would also be opened in industries including: sustainable energy, mass transportation, education, green construction, and even in the design and delivery of affordable, universal healthcare services. Without these other supporting/enabling competencies and capabilities, the likelihood of ever establishing and sustaining a world class manufacturing capability here in America is little more than a pipe dream.

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