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There Is No Such Thing as a Good Manufacturing Job!

By Kevin O’Marah | Published: August 2, 2010

Politicians talk a lot about how their policies will help the economy by creating “good” manufacturing jobs, and everybody nods as though the way forward is ever more people marching in the factory door when the whistle blows to start the shift — wrong.

Manufacturing is a big part of what made America great, but let’s not confuse the Rockwellian image of 1950s middle class nirvana with the reality that awaits a rebranded manufacturing sector suited to the needs and possibilities of the age before us.  Here in 2010 we are well into the 21st century and decidedly across the threshold of an idea-based economy.  Good jobs today are those for which brains count more than brawn and creativity is worth more than punctuality.

Manufacturing — make no mistake — won’t ever disappear, no matter how virtual the economy gets.  Instead, it morphs, from a factory-centric image in which widgets travel an assembly line being tapped and tightened by hourly-wage workers, to a brave new world with two classes of production: craft and commodity.  In the first class, brains manifest as artisanal skill, applying true craftsmanship to the welding, machining, mixing, or finishing needed to convert materials into goods.  At the high end, companies like Harley Davidson manufacture stuff that customers treat as art.  “Good” manufacturing jobs in this class will reward skill and flair with price points that are plenty high to justify at least a middle class living.

The commodity class of production is based on a very different kind of intellectual property — systems engineering.  In this rebranded manufacturing universe, ideas that earn money are those that allow machinery to automate and ever more precisely control high-volume, low-cost, predictable production.  The goods rolling off these assembly lines will have been touched by few, if any, human hands before the ultimate customer pulls it off a shelf somewhere.  I like to think of it as “robotics,” because the image is cool, but also because it’s a fair way to describe a manufacturing sector with virtually no jobs in the factory, but plenty in engineering.  Again, the leverage implied in this class of manufacturing job certainly justifies a good salary.

Good jobs are there in 21st century manufacturing, but the icons that reflect them look more like a master sculptor or NASA scientist than an anonymous guy in coveralls.

Kevin O’Marah is group vice president, supply chain research for AMR Research, a unit of Gartner, Inc., and a member of the Manufacturing Executive Leadership Board.


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Manufacturers Need a More Holistic Approach to Energy Management

By Andy Chatha | Published: August 2, 2010

Are you really using your energy most efficiently?

As ever-increasing worldwide demand continues to push energy prices upward, maybe it’s time manufacturing companies took a broader view of how they can save money and manage their energy consumption more effectively.

Industry is one of the largest consumers of energy, and manufacturers have long considered managing consumption and minimizing costs high priorities. Many companies have already done much to improve the energy efficiency of their plants by repairing or replacing old or inefficient equipment, and optimizing maintenance, instrumentation, and automation programs.

Good start. But that’s only the first step in building and maintaining an effective energy management program that can pay dividends over time.

Organizations now need a broader perspective that takes a more holistic approach to energy management, beyond discrete projects at the equipment and plant level. Those that actively manage energy inputs and emissions on a daily basis and leverage automation and information technologies in a more systematic and consistent manner will have a competitive advantage going forward.

And that’s going to become even more important in the future. The increasingly dynamic energy market, where energy prices sometimes change several times a day, makes managing energy costs increasingly complex. The expected cap and trade system for carbon emissions will further complicate matters.

So how do you improve? There are many energy management strategies, functions, and solutions available today.

Most ERP suppliers offer, or are developing, sustainability and energy and emission management solutions that help companies take a broader view of their global assets and coordinate efforts among disciplines such as finance, purchasing, operations, engineering, and maintenance.

Plant automation technologies, such as advanced motor drives, electrical systems, field devices, regulatory control, advanced control, optimization, and production management systems, can also help by reducing demand or increasing efficiency. Simulation, advanced process control (APC), and optimization also play an important role in optimizing energy usage. Historically, APC projects have been focused on throughput.  Recently, we at ARC have noticed a significant increase in the adoption rate of these technologies specifically aimed at optimizing energy use by reducing consumption, emissions, and costs. That’s an encouraging step forward.

Manufacturers now must address energy management from the enterprise level down to field devices and motor controls. Those that are able to accurately measure, monitor, predict, and control their energy will not only lower their energy consumption, wastes, and costs, they will also create a power-shift in their competitive readiness for the future.

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

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Anyone for Collaboration?

By Paul Tate | Published: July 30, 2010

Collaborative innovation: It’s all the rage. At least, circling flocks of global management gurus are now being paid mountains of money to tell us so.

But how do you get people to innovate together when they can’t even agree on where to put the office coffee machine? And how is it that in their day, Edison, da Vinci, and Newton managed to develop world-bedazzling ideas without the help of high-tech, cross-fertilizing, partner-rich, collaborative ”think-ins.”

Of course, those luminaries weren’t entirely alone in their pursuits. Geniuses, perhaps, but all were also part of small groups of forward-thinking individuals, the learned art sets, nascent Western learning academies, professional societies, smoke-filled coffee houses, and educated evening soirees of their times. Maybe they were just the guys who made it into the history books and became famous.

And today the complexity of innovation challenges and new product development — whether a new pharmaceutical breakthrough or a unique engineering vision — is often so vast and deep that any individual brain is likely to collapse under a flood of multi-dimensional data before it ever gets the chance to process a creative thought into a real innovative development. What’s more, an idea is only a seed that  must be turned into something practical that people can use, or apply, or even buy at their local store to enhance their lives. And that takes a lot more than a single Eureka moment.

Clearly, if we don’t start collaborating more effectively, we won’t be creating, or at least spotting, the truly valuable innovations that we need to keep global industries moving forward.

But does this really mean we now must spend all our time building multi-layered, corporate-wide innovation programs to get these new ideas into action? Are these really all you need?

Maybe we should keep in mind the essential power of personal creativity, making more of an effort to foster an atmosphere in which individual brilliance is fairly acknowledged and encouraged. That may keep us from becoming overly obsessed with structured corporate processes that we feebly hope will result in a flow of ground-breaking sparks of invention that will suddenly deliver competitive salvation.

Seems to me that no matter how you may formalize innovation structures, ultimately you still need the odd enlightened genius or two to really make transformational innovation a reality.

Ultimately, the future depends on the spirit of innovation, and the natural sense of collaboration, in the hearts and minds of the individuals in your organization.

Processes may help. But let the people shine.

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Manufacturing Will Only Get Smarter

By Chris Chiappinelli | Published: July 29, 2010

Someone looking to sketch the factory of the future could easily get lost in visions of sci-fi fancy, from the production facility devoid of humans to the obsolescence of factories themselves and the creation of personalized manufacturing capabilities. Wild scenarios abound, and some will come true. But first will come the mundane improvements that delight few but please many.

I trust I won’t ruffle many feathers by saying that some manufacturers are not very good at forecasting demand for their products. There are numerous reasons for this, including too much reliance on historical data. In addition, financial pressures and risk aversion often conspire to make manufacturers poor weathermen, left wagging their thumbs in the air, calling for rain but too poor to buy a poncho. At the factory level, such pseudo-science translates into poor planning. Stockouts, expediting, and low customer satisfaction become the norm.

The good news is that the factory of the future won’t need to place its figurative thumb in the breeze. It will know what to produce. And the groundwork, mundane though it may be, is being laid today.

Take Walmart, for example. The world’s largest retailer announced last week that it will attach removable RFID tags to merchandise it receives from manufacturers and distributors and places on its shelves. It will use the information collected via the tags to keep its shelves stocked properly.

The Wall Street Journal article covering the RFID news included this quote from Raul Vazquez, the executive in charge of Walmart stores in the western United States:

“This ability to wave the wand and have a sense of all the products that are on the floor or in the back room in seconds is something that we feel can really transform our business.”

That’s great for Walmart, and the information should eventually trickle back to the manufacturer through Walmart’s Retail Link service or other channels, but the factory of the future will hear from Walmart’s shelves automatically. Picture: Real-time records of units sold enter your ERP system from Walmart, Best Buy, CVS, or any other node of your retail supply chain. An intelligent agent analyzes the replenishment implications. If, for instance, it’s late August and the sold units are beach chairs, the agent might decide not to issue a restock. If, instead, it is late May and 10 coolers just sold, imagine your ERP system communicating a new order to your MES and control system, which together coordinate the production schedule for the needed items, triggering your supply chain management system to plan the transportation events needed to get the order to its destination.

If you think that’s too far in the future, remember that the grunt work is being done today.

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How Can There Be a Skills Shortage?

By Jeff Moad | Published: July 29, 2010

One of the more persistent post-recession paradoxes is that, although manufacturing has experienced massive layoffs in recent years, manufacturers say they still struggle to fill many of the skilled positions that remain.

Think about it. The National Association of Manufacturers recently estimated that U.S. manufacturing lost 2 million jobs during the 19-month period ending in July 2009. And, still, manufacturers — particularly those in aerospace and defense and life sciences — continue to say they can’t find qualified people to fill openings. In a recent survey conducted by Deloitte, NAM, and Oracle, half of manufacturing companies reported shortages of skilled production workers.

The same report, however, found that the way manufacturers manage people has a lot to do with the problem. Specifically, although manufacturers say that talent planning, talent acquisition, and talent development are increasingly important to future business success, they admit that today they aren’t doing a good enough job managing and developing talent, according to the report.

Manufacturers responding to the survey said that among their most important talent management priorities are: defining a clear and explicit people strategy that is linked to business strategy, and adequately training employees in next-generation technologies such as Web 2.0 and advanced design technologies. Yet manufacturers admit their current performance levels on those priority items are well below where they should be.

“Companies need to increase attention to clarify business and people strategies, communications and performance measurement, as well as employee development with particular focus on the latest technologies, problem-solving skills, and change readiness,” the report states.

As paradoxical as it may seem, I don’t doubt that manufacturers are having trouble filling skilled production and other manufacturing jobs. As advanced automation technologies have continued to enter the plant and as more production has been outsourced, new technical and collaborative skills have come into demand. At the same time, young people entering the workforce — and their parents — are steering clear of manufacturing, which they mistakenly see as a dirty, difficult, and unrewarding field.

But this means that manufacturers must work harder and smarter to find, recruit, and develop the skills they need. Too many, I’m afraid, continue to be more passive than they should be about managing and developing talent. The truth is that they can no longer sit back and wait for the right people with the right skills to knock on their doors.

Manufacturers need to get every bit as aggressive about finding and developing talent as they are today about finding low-cost, high-quality suppliers.

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It’s All About Value Added

By David R. Brousell | Published: July 28, 2010

The game in manufacturing today is rapidly moving beyond just making a product, selling a product, and servicing a product. Now, it’s all about what else you can do for a customer.

Some call this idea value-added manufacturing. But what does it mean?

First, it means really understanding customer needs at a deep level. Today, manufacturers must understand a customer’s market dynamics — the chain of business processes, relationships, and connection points that weave together the various constituents of that customer’s business chain.

Clearly, this sort of understanding goes beyond intuition and traditional customer after-sales surveys. What we’re talking about here is a form of business intelligence enabled by the analysis of granular customer and market data. For many manufacturers, this means having business analysis competence in-house.

It can also mean opening up your company in ways you haven’t before. S&S Hinge, a Bloomingdale, IL, maker of continuous hinges, helps customers manage their supply chains by providing visibility into inventory and materials. “They have visibility into our raw materials and production levels,” says Richard B. Sade, vice president of S&S. “In addition. we can help customers manage the engineering side and steer them in the direction of a design that aligns with our system. This service alone has brought us a boatload of work.”

The supply chain visibility service, Sade says, has enabled S&S to command a 5% premium on sales.

It’s this kind of out-of-the-box thinking that enables manufacturers to forge ahead to a better future. And it’s happening in many different areas of manufacturing, all adding up to a profound transformation of the industry.

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