Harvard Business Review Blog Talks U.S. Manufacturing
If you are a regular reader of Beyond Lean, you may know that I am a very big supporter of U.S. manufacturing. I believe it is the foundation for economic prosperity for our country or any country for that matter. Lean thinking and principles can help guide any business to success and overcome many economic and governmental situations.
Recently, the Harvard Business Review Blog has had posts talking about much of the same. Here are a few of the posts.
The authors break jobs into two categories.
But we were able to classify all jobs as either creativity-oriented or routine-oriented. And within the routine-oriented classification, there are three distinct types: routine-physical (e.g. an auto assembly plant worker); routine-service (e.g. an accounts payable clerk); and routine-resource (e.g. a coal miner).
The authors explain that creative-oriented jobs pay more and pose a great question.
…the real challenge for the U.S. economy is what to do with routine-oriented jobs in dispersed industries.
And their response to this:
There is no quick fix for this problem. But my view (and Richard’s) is that we have to rethink how we utilize workers in our advanced economy.
…But I believe that America can influence the slope of the line of increasing creativity-oriented jobs by leaning toward creativity; giving workers the encouragement and space to innovate; utilizing the most of their brain, not the least of it. That would be the grass-roots way out of America’s economic doldrums that everyone is looking for.
I interpret this as engaging everyone in the organization, even those doing what is considered a routine-oriented job, in innovating the business. Innovating is also about how to change the process to be better. Engage the minds and hearts of the employees not just the hands and feet.
The U.S. competitiveness debate too often devolves into a cry for more Apples and more Ciscos on American shores, when what the country really needs is more Hospiras.
Hospira is an advanced contract manufacturer.
The author talks about the importance of manufacturing for innovation. Something I believe to be true and how we must open our mind to what the definition of innovation can mean.
In the U.S., “innovation” typically means just one thing to people: novel gadgets. Few policy makers realize that much of the innovation that has propelled China’s economy, for example, is of the incremental or process type. Many of us admire Apple for its originality but tend to forget the importance of its power-supply innovations, all of which were done in China by a Taiwanese company.
When it comes to process improvements, American companies are stagnating at best, and in many cases slipping backward. Policy makers need to appreciate the value of keeping incremental and process innovation in the United States.
I don’t agree that the U.S. needs policy makers to give tax breaks and help U.S. companies realize the importance of manufacturing to all types of innovation. There are U.S. companies that have realized that on their own. I’m sure even Apple has realized the importance of the innovations from their suppliers. It is the companies that need to realize the benefits of this and make the effort to change their thinking around this.
A growing number of executives of U.S.-based companies are repatriating their manufacturing capabilities — moving some production operations back from overseas.
Many companies have been moving manufacturing back to the U.S. In fact, enough have done it the movement has a name…reshoring or onshoring.
The post talks about governmental help to support this movement. While, the governmental help would be nice it is not necessary. There are plenty of companies that have made the move without help from the government.
Here are three bullet points the author says the governmental help recognizes:
- Companies compete on cost and responsiveness, and this balance shifts dramatically when labor costs rise and the locus of demand shifts.
Labor cost has nothing to do with responsiveness. Quick lead times and location has to do with this. When total cost is looked at from end-to-end companies usually find that cheap labor really isn’t lowering their cost either.
- Local talent and skills are essential to productivity and innovation. Long-term depletion of manufacturing skills will make it hard to reverse the trend.
I think this is right on. It will be hard to reverse the trend but I think with more companies bringing manufacturing back to the U.S. this is helping to keep the skills from depleting.
- Research and development incentives provided by the U.S. government must be tied to manufacturing operations. Otherwise, whatever is developed with taxpayer money could easily be moved to other regions associated with low-cost manufacturing.
I don’t agree with this. This comes down to a company’s morals and beliefs. If they want to move some innovation out of the country they will do it. Their are companies innovating and manufacturing in the U.S. It just may not be the high profile company like Apple.
It is great to see more and more discussion about the importance of manufacturing in the U.S. That was not the case just a couple of years ago. Especially on a high profile site like HBR. The authors there are still spouting off too much about how the government needs to change regulations. They need to start asking how all the companies that have already moved manufacturing back to the U.S. did it. If they did, they might start writing more about Lean and end-to-end value stream thinking.
Posted on March 22, 2012, in Government, Innovation, Manufacturing and tagged Apple, Blog, Government, Harvard Business Review, Innovation, Lean Principles, Manufacturing, Thinking. Bookmark the permalink. 2 Comments.