Like most industries, the manufacturing sector is transforming rapidly. Because of recent technological advances and globalization, U.S. manufacturing is facing intense international competition, increasing market volatility and complexity, a declining workforce, and a host of other challenges. Yet we know that in order to have a strong economy, we need a strong manufacturing base. So what's the answer?
Today's manufacturers must transform along with the rest of the world by adopting six advanced next generation manufacturing principles. They are:
- Anticipate customer needs: Look at your customers' future and focus on what you DO know rather than what you don't know. Ask, "What are the hard trends, the things that will happen, versus the things that might happen? What are the industries that are converging around our customers that our customers currently don't see?" Then you can start seeing both needs and opportunities before they happen.
- Innovate around the core: What are your core competencies? Are you still using your core competencies? In the past, manufacturers could go decades between innovations. That strategy doesn't work anymore. Today you cannot just innovate now and then: to survive and thrive in a time of vertical change, you have to be innovating around your core competencies continuously. So what is your core, and are you using it?
- Focus on collaboration: Collaboration is much different than cooperation. Cooperation is based on scarcity and it contains within it the assumption that your interests and mine are inherently in conflict; however, we will temporarily set aside those cross-purposes to find some cautious tactical common ground. In contrast, collaboration is when we co-create the future together. It's about working with everyone else, even your competitors, to make a bigger pie for all. It's based on abundance and requires working together under higher levels of trust and connectivity.
- Pre-solve problems: The best way to avoid problems is to predict and pre-solve them. How? Use hard trends to look into the visible future and ask, "What are the problems that we can see based on anticipating customer needs?" Get that down to a short list that's aligned with your core competencies. Then that's where you focus because you can see which problems are coming. Additionally, look at your own company in the same manner to determine the problems you're about to face. Solve them before they happen so they don't occur in the midst of rapid change and transformation. That's the only way to stay ahead of the curve.
- Inform and communicate: Informing is one-way. It's static and doesn't always cause action. Communicating is two-way. It's dynamic and usually causes action. Social media is a good example of engagement in communication, which is why it's spreading so rapidly and becoming a business tool. Next generation manufacturers understand that you don't just inform; you also communicate, develop that strategy, and move it out internally as well as externally.
- Do continuous de-commoditization: The minute you come up with something new, a competitor will copy it. As they do so, your innovative product or service slowly becomes a commodity. The margins get thinner as time goes on. But instead of letting the margins get thinner and riding them down, you can wrap a service around a product or wrap a service around a service to add new value. You can think creatively about your product or service so you can repackage it, redefine it, revamp it, or somehow make it unique in the marketplace again. When you do continuous de-commoditization, you'll find yourself with good margins and a growing business.
In a competitive global economy that is becoming more tightly connected every day, U.S. manufacturers can no longer do things the way they've always been done. Adopting these next generation manufacturing principles is the only way to obtain the talents, capabilities, and resources necessary to build a highly effective enterprise that thrives in a global marketplace.
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It is so dangerous to pretend that a little tweak here, or a little squeeze there, and everything will be OK. Put lipstick on a Pig, and it's still a Pig.
We don't need tweaks, we need to overhaul.
Corporate tax rates
Regulations and red tape
Access to markets
Access to skilled labor
Technology infrastructure
Physical infrastructure
Proximity to customers and suppliers
Etc.
We need to look at all the variables and focus on the ones that are our core competencies and pursue manufacturing needing those. Additionally we need to anticipate what the basket of factors will be in the future and lay the groundwork for that. That is what the author is saying.
Protectionism will not work.
For a lucky few who control enough capital to profit from the global economy, the Donald Trumps of the world, globalism has been very lucrative.
For the rest of us, who exist in the economy, instead of on top of it, globalism has been a disaster.
The first victims were the manufacturing workers. 50,000 manufacturing jobs per month since 2001 have been lost. This was the year that China was granted WTO status. (2)
Now we are seeing the second wave. Bankrupt governments are forcing wage and benefit cuts from teachers, and industries like the airline industry are laying off workers and cutting compensation. (3)
References:
1. http://www.nber.org/chapters/c12575.pdf
2. http://www.tradenewswire.net/tag/china-economy
3. http://www.tulsaworld.com/site/articlepath.aspx?articleid=20120205_46_E1_CUTLIN105925
Moving to protectionism as you cite would be a disaster. It would only stifle innovation by protecting industries from competition and raise prices to hundreds of millions of consumers to save thousands of jobs. We need to continually stay ahead and innovate and highlight our strengths, not try and compete on hourly wages.
Dems don't understand that competition and move to protectionism just as you cite. Protecting us from foreign competition is not going to make us strong, but raise our prices and reduce our choices.