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The Engineering Talent Shortage: What Are You Doing About It?

By Jeff Moad | Published: November 26, 2010

One of the frequent refrains we hear from manufacturing executives is that they are concerned about the lack of well-prepared engineering students emerging from universities. Although many manufacturers in the U.S. and Europe continue to move production—and production jobs—offshore, at home they are in greater need than ever of engineering and other technical workers who can design the products and processes of tomorrow. Without a fresh influx of such engineering talent, many worry that they simply won’t be able to respond quickly enough to the rapidly changing business challenges they face.

Despite these often-express concerns, however, few manufacturers are taking steps themselves to understand and address the engineering talent shortfall. Recently, however, I had a chance to speak with executives at one leading semiconductor maker that is taking direct action that could benefit all manufacturers worried about the engineering talent supply. Boise, ID-based Micron Technology recently gave $1.2 million to the University of Idaho to fund a four-year study on why some students may not perform well—or chose careers—in the areas of science, technology, engineering, and math (STEM).

The research project, called the STEM Educational Research Initiative, is both ambitious and unique. Over the first three years, researchers will interview students in grades K-12 across Idaho as well as educators, parents, and other community members. The idea is to paint a holistic picture of the barriers that stand in the way of young people pursuing STEM studies and careers. In the fourth year, the project will develop and test programs intended to overcome those barriers. The STEM initiative is unique because it is looking at the wide range of cultural issues that today inhibit interest in STEM studies and careers among young people.

So, why would Micron fork over big bucks to back such a study? Like a lot of manufacturers, Micron is increasingly struggling to find enough engineering graduates from local schools to support its growth.

“Our facilities in Boise are heavily into research and development, so we require higher levels of technical expertise and education,” Micron Technology Foundation manager Janine Rush-Byers told me. “Not being able to go out and get the students we need locally is a big problem.” A local source of engineering talent is especially important to Micron because, in some cases, it’s difficult for the company to convince established engineers to relocate to Boise.

The STEM initiative is, clearly, not a short-term fix. Not only will the project run four years, but any resulting programs will be applied at the K-12 level, meaning that any gains in the pipeline of STEM university graduates will be many years down the road.

But at least Micron is taking steps to understand and solve the problem rather than just complaining about it. What is your company doing to increase the flow of new engineering talent?

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Global Manufacturing: Because It’s Worth It

By Paul Tate | Published: November 4, 2010

With a worldwide reputation for cosmetics that rejuvenate, France’s L’Oréal is setting an innovative example to global manufacturers on how to re-invigorate global manufacturing by applying a transformational foundation of cultural and technological change.

During an exclusive tour of L’Oréal’s Franklin, NJ, plant yesterday by members of the Manufacturing Leadership Council and specially invited guests, the benefits were clear to see. Team performance metrics are everywhere, charting marked gains in efficiency, output, quality, machine downtime, and much more. In one area alone, collaborative teamwork has recently slashed production times for lip gloss batches from 264 minutes to just 90.

It’s a strategy that is underpinned by the company’s recently developed integrated technology platform, called ISIS, which combines Apriso’s FlexNet system with SAP. L’Oréal has already rolled out the platform in 24 of its 38 plants worldwide.

“Our cultural strategies are just as important as our technological and organizational changes,” stressed Nicole Zukowski, L’Oréal’s first woman plant manager in North America, who oversees the 250 staffers producing lipstick and skin products at the 195,000-sq. ft. Franklin facility.

The inspiring plant tour, and L’Oréal’s focus on cultural change, was an apt prelude to the latest Manufacturing Leadership Council discussion on Global Manufacturing and Supply Networks, held later that evening.

Joining us around the discussion table were George Nickel, Director, Global Process Architecture, at Johnson & Johnson Consumer Products and a Leadership Board Member; Morris Lenczicki, VP, Industrial Systems Applications, at L’Oréal USA and a Leadership Council Member; Jill O’Sullivan, Professor of Manufacturing at Farmingdale State College and a Leadership Council Member; Kenneth McGuire, Board Member of the Association of Manufacturing Excellence; Kevin Fuhr, Director, IT Integrated Supply Chain and MES, at medical technology company Becton, Dickinson; Rick Gallisa, Industry Director, Life Sciences and Consumer Goods, and Tom Hennessey, VP of Marketing Communications, at Apriso; Jeremy Shores, IT Lead, Patient Specific Products, and Gary Maingot, Director, Manufacturing Engineering, at Biomet 3i; Henk van der Ven, VP, Flavors IT and Supply Chain IT, and Peter Sattler, VP and CIO, International Flavors & Fragrances Inc.; Fred Schneider, President of precision manufacturer Volckening Inc.; Martin Silver, President and founder of Schoen Trimming & Cord, which claims to be America’s last tassel maker; and Jian Xu, Global IT Manager, Operations, at National Starch.

Combining their extensive global experience, the panelists explored many of the challenges companies face in a changing world, where new markets and new competitors emerge each day. Do manufacturers now need to distinguish more clearly between being simply international, where production is mostly local but products are sold worldwide, and being truly global? For the latter, companies aim to become an integral part of local market economies, often with local sourcing, production, and, most importantly, a more enlightened awareness of local conditions and opportunities.

Panelists recognized that integrated technologies can certainly help create common platforms for operational processes, excellence metrics, and information flows around a global organization. This allows quality levels to be maintained and best practices effectively shared. But the panelists also felt that without an awareness of how local cultures really work, innovate, and buy, the full benefits of a global strategy may simply not be achieved.

The world of manufacturing, it seems, is getting flatter every day. Those companies prepared to embrace that global change will be the ones most likely to succeed. Common technology platforms can help get you there, but combining these with greater cultural awareness and internal change, the panelists agreed, is worth it every time.

Watch for more details of the full discussion in future issues of Manufacturing Executive Leadership Journal.

Paul Tate is Executive Editor of Manufacturing Executive.

See: L’Oreal’s Manufacturing Makeover


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Future Factories: The Elegance of Simplicity

By David R. Brousell | Published: November 3, 2010

Thousands of manufacturers began gathering yesterday to attend the 19th annual Automation Fair, Rockwell Automation’s user conference and partner event, at the vast Orlando Convention Center. They come to network with each other and share stories, learn how to better use Rockwell’s technology arsenal, and discover what Rockwell’s partners may bring to the table. And there are always those who also come for personal reasons — like finding a new job or a business opportunity.

But yesterday, the Automation Fair was also the venue for a group of manufacturing and technology executives to discuss what the future may hold for factories — how we think about them, organize them, run them, and use technology to automate them.

Under the auspices of Manufacturing Executive, Evan Hand Jr., director of electrical and controls at ConAgra Foods; Tom Mascari, VP at FONA International; Jim Davis, vice provost at UCLA; John Genovesi and Bob Honor, both VPs at Rockwell Automation; Bob Dean, executive director, and Stuart Robinson, head of industrial automation, Cisco Systems; Jordan Berkley, director, MES product management, at Apriso; and Craig Resnick, research director at ARC Advisory Group, met for four hours to envision the future factory. What they sketched out was a mixture of the practical and the hopeful. Apart from special guests invited by ME, all are members of ME’s Manufacturing Leadership Council, a new group of manufacturing executives dedicated to the idea of creating a better future for manufacturing. (You can find out more about this group at http://www.manufacturing-executive.com/.)

On the practical side, and clearly in line with current business thinking about production, panelists were in agreement that future factories and plants must have the ability to be agile and flexible in responding to business trends and customer demands. A well-educated and motivated workforce, and one in sufficient numbers, is mandatory. At the same time, they believe that no one model will define what a future factory looks like. Some will be large, some smaller; some will serve local needs, while others will be globally oriented. But all, the panelists said, will be increasingly information-driven and dependent upon advancements in automation and information technologies, particularly ongoing developments in cloud computing, software-as-a-service, collaboration, and manufacturing intelligence. The “smart” or increasingly “intelligent” plant is headed our way.

But to achieve all of this is no easy task or set of tasks. In fact, creating the fast-moving, information-driven, high-tech factory of the future may run the risk of ever more — you guessed it, the “C” word — complexity. It’s complexity that must be dealt with effectively at the same time we speed forth with ideas about the future factory, or hoped-for gains in productivity, efficiency, and flexibility may not be realized.

Keep it simple, but not simplistic, was a major message from the panel yesterday. Increased complexity through new layers of technology and the integration that will attend them is an inevitability, but it must be masked, shielded from the user. As UCLA’s Jim Davis said, “Complexity is the interaction of simple things.”

That’s a lesson to be learned.

Tonight, another group of Manufacturing Leadership Council members meet in New Jersey to tour a L’Oréal plant and discuss the subject of global manufacturing. Stay tuned.

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How Electric Cars Will Disrupt Auto Manufacturing

By Pierfrancesco Manenti | Published: November 3, 2010

While most traditional automakers are busy trying to maintain their existing manufacturing practices and factory landscapes, the emergence of new electric cars looks set to have a disruptive impact on how automobiles are produced and components sourced in the future.

Among the exhibits at the recent Paris auto show, one new model in particular caught my attention: the innovative Furtive-eGT sports car from French company Exagon Motors. This 380-horsepower vehicle is entirely electric, can sprint from zero to 62 mph (zero to 100 kilometers per hour) in just 3.6 seconds, and has a top speed of 155 mph, clearly challenging the ”golf-cart” stereotype that often sticks to electric vehicles.

And unlike other high-speed electric autos such as Tesla’s Roadster, it is not built around an existing gasoline-car chassis. The Furtive-eGT is designed from scratch as an electric car by a small but innovative new automaker.

The emergence of these tiny automakers able to bring disruptive and rapid innovation to the conservative automotive industry is very interesting. Many huge established automotive OEMs have already designed electric vehicles, or are well on their way. However, when dealing with innovative electric technologies, traditional OEMs tend to minimize transition costs, for example by reusing existing chassis, accommodating existing assembly layouts, and focusing on hybrid vehicles rather than on pure electric cars. By comparison, the newcomers have a strong advantage: They don’t need to set themselves free from their heritage.

For example, Peugeot Citroën’s HYbrid4 “parallel hybrid” architecture has the electric motor housed in the rear suspension unit, independently driving the rear wheels. So, the automaker’s traditional vehicle platforms, which are generally front engine/front wheel drive, won’t require extensive modification to accommodate the new drive package, and can be assembled on the same line as conventional combustion engine versions. But isn’t this just adding further complexity to an already over-complex automotive industry?

What’s more, the critical components for future electric vehicles will mean less hardware –  the mechanics behind the internal combustion engine — and more software — embedded systems, semiconductors, electronics, batteries, etc. This will lead to a revolution in the supplier’s landscape and manufacturing processes. Indeed, we expect that producing an electric car will be more like a software factory rather than a traditional assembly-line process. This scenario is not too far away. Around 30 computers, with millions of lines of code, can already be found in a modern car. Software governs almost everything, from driver assistance (e.g. brake control), compliance (carbon dioxide emissions), and infotainment (music, video, radio, even the Internet).

Although dealing with software development might sound easier than sequencing a purely mechanical just-in-time assembly line, nevertheless automakers will rapidly realize that the shift toward more of a software factory will generate a new set of challenges to makers of electric cars.

The major challenge will be producing and integrating bug-free in-car software. NASA’s Software Assurance Technology Center managed to produce code with just 0.1 errors per 1,000 lines of code, generally regarded as one of the best-ever error rates. Even organizations with deep pockets, such as Microsoft, reckon that software contains 0.5 errors per 1,000 lines on release to the public (worryingly, this suggests that the 40 million lines of code in Windows XP contained 20,000 bugs when launched!).

Yet vehicle safety cannot be compromised by poorly tested software updates. Automotive OEMs need to acquire the capability of managing the software lifecycle properly — and soon. They need to be able to load the appropriate software configuration for the right vehicle, matching the customer’s ordered configuration, without errors, during many stages of the manufacturing process itself. Automakers must also understand that software lifecycles are an order of magnitude faster than vehicle lifecycles. So, going forward, in-car software must be released frequently to bring new features and capabilities to the market, and owners will expect updates to be available online, and with bugs fixed.

IDC believes that optimizing the software factory, reducing software bugs, and managing software versioning will become as important as sequencing assembly lines. And the two will have to be in sync, and operate just-in-time.

Perhaps the emergence of the electric car and the auto software factory will be a golden opportunity for fast-track newcomers in the sector to gain market share from the more conservative, established automakers in the years ahead.

Pierfrancesco Manenti is EMEA Research Director at IDC Manufacturing Insights in Milan, Italy, and a Manufacturing Executive Leadership Board member.

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Fighting Product Counterfeiters Requires a Multi-Layered Supply Chain Approach

By Andy Chatha | Published: November 3, 2010

Counterfeit products have penetrated almost all supply chains and pose an increasing risk to a manufacturer’s bottom line, intellectual property (IP), reputation and brand, warranties, and returns.  Low risk of prosecution and enormous profit potential also make counterfeiting an attractive business enterprise for criminals.

Very few products are immune to counterfeiting these days, whether it’s electronic components, automotive parts, airplane parts, agrichemical products, food, fashion items, or pharmaceutical and medical device products.  These are marketed as genuine branded products and enter the supply chain through normal distribution networks or other, less-legal channels.  Yet companies often do not want to risk exposing the extent of counterfeiting because it can damage the company image.

There are many reasons for this current counterfeit explosion–the ease of marketing and purchasing products over the Internet, the global economy, and the high profits criminals and others can make. The U.S. Department of Commerce estimates that 5%-7% of all world trade involves counterfeit products, and estimates the cost to the global economy at more than $650 billion per year.

The inherently concealed nature of counterfeiting means that many counterfeit products will never be revealed; this makes measuring the value of counterfeit products at best a broad estimate. Some companies don’t even realize how many of their products are being counterfeited and, upon analysis, are often astounded by the results. Many companies do not want anyone, even within their own company, to know the extent of counterfeit products entering their supply chain. Nor do companies and governments want the public to know the extent of the problem unless it involves a health or safety risk, in which case they must institute a recall to avoid liability.

To address the growing global counterfeiting problems, manufacturers must understand the range of solutions, technologies, and methodologies they can employ to prevent it happening. A “one solution fits all” approach may not be best to solve the counterfeit or diversion problem. It’s important to understand the extensive methodologies and technologies that deal with anti-counterfeiting and brand protection. The right solution must examine the supply chain, the product, the technologies, policies, training, global standards, organizational teams, and enforcement.  The solution should also correlate with the product and packaging.

According to an ongoing survey conducted by ARC Advisory Group, leading companies address anti-counterfeiting and brand Protection (ABP) using a multi-faceted, multi-layered approach. These companies are reorganizing and creating dedicated teams to concentrate on ABP. The multi-faceted approach includes educating employees and partners across the supply chain, tightening supply chain sources, tracking counterfeit problems to the origin, recognizing counterfeit problems, working with enforcement agencies and other organizations for reporting problems, and implementing new technologies.

Leaders also use a multi-layered approach, taking advantage of the latest technologies. For example, more leader companies use encrypted RFID, sophisticated track–and-trace technologies, and advanced optical holograms with multiple layers, as well as a broad range of other technologies. Leaders take advantage of their status to collaborate across the supply chain. They have more visibility into the supply chain, and incorporate the data within their ERP or MES systems.

Counterfeiting is now a concern for nearly every product, company, supply chain, government, and industry, and the problem is increasing. An effective global approach is needed to counter the problem before it undermines the integrity of the manufacturing sector worldwide.

(Click on the link if you would also like to participate in ARC’s confidential survey on anti-counterfeiting and brand protection best practices.)

Andy Chatha is the president and founder of ARC Advisory Group and a member of the Manufacturing Executive Leadership Board.

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Sustainability: Are We Making Progress?

By David R. Brousell | Published: October 7, 2010

The green movement has been on the march for many years now. So how are we doing? Like many things, it depends upon whom you ask.

To hear John Gagel tell it, the sustainability movement has crossed an important threshold. The manager of sustainable practices at Lexmark believes that green has now reached a critical mass. Speaking last week at a panel discussion on sustainability put together by SAP, which offers software to automate and manage business processes associated with sustainability, Gagel said Lexmark has been working with partners to find ways to innovate in everything from the language of sustainability to taking costs out of the supply chain.

“We’re translating the language of sustainability to the language of business,” he said.

But, curiously, when it comes to setting its sustainability goals, Lexmark doesn’t benchmark against other, like companies. Rather, “we look at our own products and set tough goals,” he said.

Another panelist, Dr. Jay Golden, director of corporate sustainability at the Nicholas Institute for Environmental Policy Solutions at Duke University and co-founder of the Sustainability Consortium, said one of the challenges in sustainability is that big companies such as Wal-Mart and Target report on their green initiatives differently. “What are the scientific rules of the road?” he asked.”We need to understand the science.”

Golden’s observation was supported by Kevin Myette, director of product integrity at Recreational Equipment, Inc. (REI), a maker and retailer of outdoor gear. “The challenge in supply chains is that we don’t have confidence in the science in all areas,” Myette said.

Dr. Peter Graf, an executive vice president at SAP and the company’s chief sustainability officer, used a car analogy to suggest where the movement needs to head. “When you buy a car, you know what MPG means,” he said. Graf also stressed that perceptions of whether a company is well managed are increasingly being linked to its sustainability efforts.

“More investors are asking the question ‘Do you have risk under control?’ ” Graf said. And many retailers, Gagel noted, are incorporating sustainability requirements into RFQs.

For Myette of REI, sustainability is tantamount to what he called the next quality movement.

I left the panel last Tuesday with the distinct impression that a lot of smart people are working on sustainability but that the “science,” as Dr. Golden pointed out, still has a ways to go.

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Treading a Greener Path to Recovery

By Pierfrancesco Manenti | Published: September 27, 2010

What effect has the economic recession had on environmental excellence programs in the manufacturing industry? Has the goal of environmental excellence been, or will it be, sacrificed in the interests of near-term cash flow savings in the post-recessionary manufacturing world?

So far, this hasn’t happened. Most leading manufacturing companies we talk to still recognize the importance of having a clearly defined environmental strategy. These are pragmatic strategies that go beyond compliance mandates or communicating real or potential environmental achievements. The strategies now being put in place by leading organizations prioritize efforts to maximize the real, tangible benefits that can be harvested from sustainability initiatives.

Despite the economic challenges of the last few years, the volatile costs of raw materials and energy, coupled with growing market sensitivity to climate change issues, continue to change the commercial focus and investment character of corporate business initiatives. Indeed, there is now even more pressure for companies to incorporate sustainable practices into their business strategies. This continuing effort is about creating competitive cost advantages through sustainable practices while at the same time growing revenue by offering products that are preferred by customers because they minimize their environmental impact.

Many environmentally aware companies I speak with continue to state that they will not divert from this path. In fact, the difficult economic situation places an even greater importance on operational efficiency that reduces operating costs and lowers energy and resource consumption through environmental excellence efforts.

Evidence of positive business results are tangible: The journey toward environmental excellence brings tremendous benefits — lower costs, higher revenue, more efficient assets, and a powerful market reputation as a socially responsible organization.

Nevertheless, the path to achieving environmental excellence remains complex, transformative, and incremental. It is more important than ever for companies willing to embark on this journey to understand that the progress toward environmental excellence is a step-by-step path: first, self-assess the current state, then understand the efforts most likely to be sustained, and then identify the rewards to be gained.

Here are some further suggestions for companies willing to embark on the environmental excellence journey:

  • First, define a strategy that communicates a mission, identifies metrics, and sets specific goals.
  • Consider that environmental excellence efforts have to be similar to a continuous improvement program such as lean or Six Sigma, and are not something that can be implemented just by leveraging spare resources.
  • Develop new capabilities in the organization and gain employee commitment to capture new business value.
  • Finally, remember to communicate openly with all stakeholders, internally and externally (all your efforts will be for nothing without good internal and external marketing).

Changing the world requires us to change ourselves first. This holds true for manufacturing companies too.

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Innovating for Growth?

By Paul Tate | Published: September 3, 2010

Remember growth? The corporate über-goal every senior management team spent days worrying about in strategy meetings before the global recession? Well, it’s back in fashion. But how do companies achieve growth again in the New Normal? Global management consultants McKinsey and Co. have been trying to find out.

In a new survey from the corporate front line, titled “Innovation and Commercialization 2010,” the vast majority of senior management respondents rank innovation as a critical priority for future growth. In fact, innovation is cited as “very” or ”extremely” important by 80% of executives seeking to expand their core businesses, and by more than 90% of executives at companies in the early stages of expansion.

Of course, there may be little choice left for many manufacturing executives in the current economic climate. After cutting everything in the organization to the bone over the past two years — by closing unprofitable plants, divesting non-core businesses, firing a small army of staff, and reducing travel budgets to the cost of a repair kit for the corporate bicycle — there’s only one thing left to do: Expand.

The McKinsey innovation study shows that the current corporate focus is clearly on organic growth in existing markets, through new products and services (68%), and through the pursuit of new customers (63%), rather than growth fuelled by entering new markets or M&A.

But while companies are hoping that innovation will help drive this organic growth, their management of innovation hasn’t changed, McKinsey says. Nor, it seems, have the barriers. Looking back over the last few years, McKinsey points out that companies ”have made little progress in surmounting” the core barriers to successful innovation.

Time for a rethink, then, perhaps most obviously in how companies approach collaboration. For example, in the survey, only 44% of respondents say their companies have tried partnering more successfully with suppliers and technology firms; even fewer, 39%, have integrated customer insights into the innovation process.

Worse, only 30% of respondents report that their current partnerships and open innovation strategies have been ”extremely” or ”very” effective.

Clearly there’s lots of room for improvement here. Collaboration can deliver exceptional results, but an enlightened approach to the real challenges in such relationships is now needed more than ever to overcome the obstacles to success.

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Manufacturing Needs to Rebrand

By Larry Lapide | Published: August 30, 2010

After watching the History Channel’s TV series, “The Story of Us,” which covered U.S. history from colonial times, I realized the importance that innovation and technology played in the country’s prosperous growth. One segment covered the build-up of the manufacturing base that helped the U.S. win World War II and left the country representing one-half of the world’s manufacturing capacity. This capacity then fueled unprecedented economic growth and affluence. Manufacturing was king.

Today, manufacturing is of less-repute. Baby boomers were advised to get a college degree so they wouldn’t have to work in a hot, dark, dirty, smelly plant. In the 1980s, when manufacturing excellence had shifted to Japan, MIT started its Leaders for Manufacturing Program to help bring back some of the shine to domestic manufacturing. Last year, MIT changed the name to the Leaders for Global Operations Program — shedding the word “manufacturing.”

What happened? The affluent United States became a consumer nation enamored of a big-picture concept — Supply Chain Management — and this fostered the perception that manufacturing was just about plant operations. The global Supply Chain Council’s Supply Chain Operations Reference (SCOR) model, launched in late 1996, highlighted four process components: source, make, deliver, and plan. Manufacturing was just one component, covering plant floor processes, not the overall management of manufacturing. In the minds of product companies, the “plan” and “deliver” processes took center stage, while “source” and “make” were often outsourced and off-shored. Manufacturing knowledge went with them.

I cringed when I heard of an apparel company that had outsourced production to China and wanted to move it to Mexico. To set up in Mexico, it had to rely on Chinese managers, having lost the employees who knew how to start up a plant! When oil prices started to rise in late 2004, the U.S. found itself short on petroleum engineers who knew how to drill for oil. A recent Wall Street Journal article, “Some Firms Struggle to Hire Despite High Unemployment,” stated that the gap in finding people to fill jobs “is most notable in manufacturing.”

Over time, the projected long-term rise in oil prices will drive “source” and “make” operations closer to points of product consumption. If they want to be competitive globally, U.S. companies need to regain the manufacturing knowledge needed to move those vital operations around. To do this requires a renewed view of the importance of “Manufacturing.”

Larry Lapide is a research affiliate at the MIT Center for Transportation & Logistics

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A New Era of Global Manufacturing

By Paul Christodoulou | Published: August 6, 2010

The last 20 years has seen a paradigm shift in the manufacturing world, as companies have moved from serving regionalized customer bases to exploiting markets and resources across the planet. The banking crisis put a temporary freeze on this transition. Now, as growth returns and companies start to invest again, the question becomes: Do we return to more of the same, or should we consider the credit crunch a boundary marking a new era in global manufacturing and supply network transformation?

It’s probably true that the key trends that launched a frenzy of globalization activity two decades ago continue to have an impact. As market barriers continue to recede, companies continue to expand their global reach. Availability of low-cost labor still drives offshoring and outsourcing decisions. In the supply chain’s vertical dimension; i.e., the various stages that exist between raw materials and the consumer, fragmentation continues as companies increasingly focus on narrower fields of competence. In its horizontal dimension;  i.e., the companies involved in the activities that make up the stages, consolidation is set to continue via M&A. And the impact of the information revolution is still being felt, with the advent of an ”internet of things” creating totally transparent supply chains. These trends have driven incredible change, and the story is certainly not over yet.

However, one might argue that these ongoing trends pale in significance against a new set of mega-drivers that are starting to emerge in the post-credit crunch picture. Global markets seem to have experienced a tipping point — from West to East, —the impact of which has not yet fully registered. As the dust settles, it may just become apparent that the so-called BRICs have not just caught up with the Western economies, but have seized the balance of power.

As one Indian industrialist recently stated: “India has changed from a pimply girl into an attractive young woman — the queue of potential suitors in lengthening.”

And it isn’t just the growing economies that are winning influence. Their indigenous companies, often criticized as too broadly spread and backward, are starting to take control, too. For example, the Indian conglomerate Tata has quietly become the largest manufacturing employer in the United Kingdom through its acquisitions of, among others, Jaguar-Land Rover, Corus, and Tetley in sectors as diverse as luxury cars, steel, and tea/coffee. Just imagine the potential impact of hundreds of ambitious Tatas emerging from India and China, bent on conquering global markets.

Another mega-trend just waiting to transform the picture is, of course, the sustainability agenda. Every company has sustainability in its mission statement, but very few know yet what it means. The winners here will be the ones that understand that every stage of the value chain will need revolutionizing if a company is to cope with the constraints of limited resources even as hundreds of millions of new consumers demand business expansion. This will necessitate a transformation of not just production and logistics networks, but of product design, process technology, and through-life support.

Seeing the next 20 years as a totally new era is vital for companies and countries trying to understand their strategies and positioning. There are likely to be only a few winners, many also-rans, and some notable losers in this new age of global manufacturing and supply networks.

Paul Christodoulou is a senior industrial fellow at the Institute for Manufacturing, University of Cambridge, UK, and a member of the Manufacturing Executive Leadership Board.

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