U.S. manufacturing employment has edged up in recent years. New policies could accelerate job gains and investment in manufacturing. Illustration: Harry Campbell for The Wall Street Journal
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(Innovation Excellence — Yoram Solomon: 6-13-16) Last month I delivered my “un-kill innovation” executive workshop to an executive team of a Fortune 500 technology company in Florida. It was a great experience all around, but at the end I was asked for the key takeaways, and I narrowed them down to the following.
There are three key things that will increase innovation in your company the most.
They are small things. They have no investment or budget associated with them. They don’t require you to roll out new processes or infrastructure. They don’t need company-wide training. All they need is a change of attitude — yours.
Accept that you are not driving (or even fostering) innovation. You are allowing innovation.
Your employees already know how important innovation is. They know it’s good. You don’t have to tell them that. All they need is the autonomy to do it. Innovation is like the sport of curling than golf. It is not the driving of the stone that gets it there–it’s the swiping and altering the state of the ice in front of it that allows the stone to reach its destination. And you can only make small adjustments. You can’t drive large ones.
Ask yourself: how do I react when one of my employees tells me that he (or she) tried something I didn’t authorize and failed?
If you react severely, and let them know that there will be consequences for trying unauthorized things–they will never do it again. But here is the thing–you know who never fails? Only those who never try. Accept that there will be trial and error on the way to success.
Let your employees try, and help them get on their feet again after they fail. This will give them the autonomy and creative freedom to try again. When your toddler starts walking, soon thereafter they start running. Very quickly they fall. What is the first thing they do after they fall? No, the first thing is not crying. The first thing is looking at you to see your reaction. Your reaction will tell them whether they should cry, or get up and keep going. If you yell “oh, no!” or react in horror–they will cry. But if you yell “come on! keep going!” they will get up and keep going.
When an employee comes to you with an idea, avoid “I’ll be the judge of that” or “I’ll know it when I see it.” Replace these reactions with “Let me tell you what will make me say yes.”
One of the most powerful factors affecting creativity (and thus innovation) is sharing the “big picture.” If you share the big picture with your employees and let them know what will make you approve a product idea (and the budget and other resources they are looking for)–you are forcing them to consider all aspects of their idea, and not just throw it over the fence to you for approval. You also reduce your workload (what a concept…), empower your employees, increase the probability that ideas are well vetted (your employees are in the front line of technology and customers, and are better positioned to assess the viability of their idea. I’m sorry to say, but you are highly disqualified to vet an idea from your position…)
Do those three things and you are guaranteed to increase the level of innovation in your company by orders of magnitude. As one of the participants in my workshop last week said: it will be transformative to the organization. Try it!
(Dr. Yoram Solomon is an inventor, a creativity researcher, coach, consultant, and trainer to large companies and their employees … is active in regional innovation and technology commercialization … and is a speaker and author on predicting the technology future and identifying opportunities for market disruption.)
(Forbes – Bill Fotsch and John Case: 6-15-16) Nearly every politician these days bewails the loss of American manufacturing jobs. Nearly every politician promises—somehow—to bring them back. We’re skeptical of these promises. Many thousands of factory jobs have been lost, and will continue to be lost, to automation, just as millions of farm jobs were lost to new technologies a century ago. And some manufacturing industries, such as garment making, will always find it impossible to produce goods in high-wage environments like our own.
All that said, US manufacturing may still be poised for a comeback. Some companies have found that overseas suppliers can’t deliver top-quality goods. Others have discovered that transportation costs and long shipping times undermine whatever cost advantage they get from producing abroad.
Some large manufacturers, like GE, have learned to compete with anyone in the world. But what about the smaller suppliers that every big plant relies on? They’ll have to step up their game if they expect to compete in a global marketplace. To see how, it might help to pay a visit to Trinity Products.
Trinity is a steel pipe manufacturer and custom fabricator, located not far from St. Louis. It employs about 160 people and does close to $100 million in annual revenue. The company makes big, infrastructure-size pipes and structures. You can see its handiwork in everything from bridges and power plants to giant signs and scoreboards. This is a tough business, dependent as it is on the level of infrastructure spending around the nation—something that Trinity’s leaders have no control over.
But Trinity is thriving, because CEO Robert Griggs and his team know something about manufacturing that many executives and company owners seem to have forgotten: no one knows how to do a job better than the person who is doing it. They have turned Trinity into a kind of learning organization, with people on the shop floor making the company more and more competitive every day. (For a fuller description of how Trinity goes about this, see our article in this month’s Manufacturing Leadership Journal.)
Trinity’s journey started with open-book management. Griggs and CFO Jim Nazzoli helped employees learn about—and track—the company’s revenue, costs, and profits. Today, the company circulates a scoreboard every morning showing billings and backlogs by product or process, along with key monthly statistics such as total orders and total mill tons.
Then they began working with a firm called the Cycle of Success Institute, known as COSi. (We have no connection to this organization.) COSi coaches helped Trinity create a system in which employees flag obstacles and bottlenecks and figure out how to solve them. “You identify a problem, put it on a list, monetize it, and prioritize it,” explains Nazzoli, who has added the title of chief continuous improvement officer to his CFO job description. High-priority projects are assigned to a team, and every two weeks the team reports back to the COSi steering committee on its progress.
“We’ve accomplished 125 projects at the mill over five years,” says Griggs. “We have all the data. We took coil splices from 25 minutes to 15. Changeovers from one size to the next size went from eight hours to five and then to three or three-and-a-half. We continuously organize and prioritize the projects. These lists never go away.”
US manufacturers have long experimented with continuous improvement systems, of course.
But this one is a little different. Because the books are open, employees can see the effects of their efforts on costs and productivity. They can also see when they’re on track for a profit-sharing bonus. That answers the question “Why should we worry about all this?” that some employees might ask. In the last five years, annual bonuses have ranged from $1,000 to $6,000 per employee.
Getting employees involved, helping them learn to think like businesspeople, sharing the wealth that they help create—this is what it will take to make American capitalism competitive again. And in the process, it just might save or generate a few more manufacturing jobs.
(We work with and write about companies that are improving business results and the lives of their employees through open-book management. Bill, founder and president of Open-Book Coaching, has more than 20 years’ experience as a business coach and has helped nearly 400 companies bring the economics of the business alive for their people. John, editor of the online publication RetoolingCapitalism.com, is author of the classic books Open-Book Management and The Open-Book Experience. His articles appeared in Inc. and Harvard Business Review.)
MAPI survey shows actual, planned automation investment high among U.S. manufacturers
(Logistics Management – Patrick Burnson: 6-13-16) A new report from the MAPI Foundation indicates that despite the economic slowdown in the industrial sector over the past year, the incidence of actual and planned automation investment is very high in American manufacturing.
The report is based on a national survey of U.S. manufacturers and non-U.S. manufacturers with a presence in this country and is the second in a series of studies on productivity that the MAPI Foundation is producing this year.
Written by Cliff Waldman, director of economic studies at the MAPI Foundation, and sponsored by Rockwell Automation, a global leader in industrial automation, the findings of the national survey show that the high incidence of automation investment spans various company sizes and manufacturing subsectors:
“Automation implementation exhibits characteristics of both capital investment and innovation investment,” observes Waldman. “While deploying machinery into a production line has characteristics of capital equipment investment, it does not appear to be as short-term oriented as capital investment.”
Waldman added, “Automation also does not appear to be an element of business expansion. Rather, it is more like process innovation whose principal goals are cost reduction and product quality improvement.”
“The findings in the MAPI Foundation’s second study confirm that automation is a critical driver of productivity and quality improvements for manufacturers as they seek to stay competitive in this challenging environment,” said Joe Kann, vice president of global business development at Rockwell Automation.
“The study also points out that automation investments are more often seen as part of a broader business-wide technology upgrade as opposed to a stand-alone application. This is consistent with Rockwell Automation’s vision of The Connected Enterprise in which operational technology is converged with information technology to drive higher levels of productivity and competitiveness,” Kann noted.
(Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites.)
Pennsylvania offers a variety of financial and technical assistance programs to support business location, expansion and industry growth. The Department of Community & Economic Development (DCED) has compiled a list of the department’s business assistance programs.
IMC is part of the state’s Partnerships for Regional Economic Performance (PREP) program.
DCED Business Services Matrix 2016
(Manufacturing Leadership — Paul Tate: 6-7-16) “Industry is about to experience more change, across more aspects of the business of manufacturing, and in a shorter time than perhaps any period of transition in the history of manufacturing”, predicted David Brousell, Co-Founder and Global Vice President of the Manufacturing Leadership Council in his opening address at the 2016 Manufacturing Leadership Summit earlier today.
Hosted by international research and consultancy company Frost & Sullivan at the Omni La Costa Resort in Carlsbad, CA, the theme of this year’s 12th Annual Summit focuses on Manufacturing 4.0: The New Rules of Leadership, and has brought together over 200 senior industry leaders from across multiple sectors of the global manufacturing sector.
Citing the results of the Manufacturing Leadership Council’s recent research study on Factories of the Future, Brousell continued that over the next five years the research suggests that a “tidal wave of digital change is coming” for manufacturing. This will engulf production and assembly processes, the devices and equipment on plant and factory floors, how design relates to production, how companies interact with customers and suppliers, and, perhaps most importantly, how and where leadership teams will pilot their companies in the years ahead.
On a broader scale, the impact of this digital transformation across society will be profound, he added. For example, until about 1900 observers suggest that human knowledge doubled around every 100 years. But today, he noted, IBM estimates that the build out of the Internet of Things alone will cause human knowledge to double every 12 hours!
Yet the digital transformation that is inherently part of M4.0 for the manufacturing sector, is still in its early stages in most companies, he explained. What’s more, any manufacturing company that believes M4.0 is simply about investing in new digital technologies alone is missing the point.
Digital tools are critically important, of course, but M4.0 is also about “cultural change and organizing differently – understanding and successfully implementing such things as flatter organizational structures and a collaborative innovation model – as well as re-tooling leadership teams with non-traditional skills sets,” he added.
The problem is that many manufacturers appear to be struggling today to fully absorb and get into position to drive and lead this new industrial revolution.
Citing another recent Council research project on Next-Generation Manufacturing Leadership, Brousell reports that, “While manufacturers expect to receive significant benefits from digitization, they also say their leaders have not yet fully adjusted their mind-sets, behaviors, and skills in ways that will be necessary to take advantage of the possibilities of digitization.”
Perhaps that’s where the biggest challenge along the journey to M4.0 may lie for many manufacturing organizations in the years ahead. Time, however, is not on the side of those who delay.
“You will not have 25 years to get on board with M4.0,” advised Brousell. “You are going to have to act fast – and with as much precision as possible.”
(Paul Tate is Research Director and Executive Editor with Frost & Sullivan’s Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council’s Board of Governors, the Council’s annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel.)
(Geopolitical Weekly – Rebecca Keller: 6-7-16) Whether you’re reading this article on a smartphone, tablet or laptop, chances are the device in front of you contains components from at least six countries spanning three or more continents. Its sleek exterior belies the complicated and intricate set of internal parts that only a global supply chain can provide. Over the past century, finished products made in a single country have become increasingly hard to find as globalization — weighted a term as it is — has stretched supply chains to the ends of the Earth. Now, anything from planes, trains and automobiles to computers, cellphones and appliances can trace its hundreds of pieces to nearly as many companies around the world. And its assembly might take place in a different country still. Opportunities for producing and assembling products and their components have spread worldwide, making it is easier for countries to climb the production value ladder. States at the bottom, extracting raw materials, can gradually move up, first making low-value components and then progressing to higher-value ones or basic assembly.
But just as technology spurred globalization and the shifts in international trade that followed, so, too, will it revolutionize how countries again do business with one another. Compounded by the economic and demographic changes taking place today, automation, advanced robotics and software-driven technologies are ushering in a new era — one of shorter supply chains that will provide fewer opportunities for the developing world. Regions once labeled “emerging economies” may instead stagnate, and the divide between the haves and have-nots within and among nations could widen further.
Did you know that the cost for attendance at one of IMC’s Open Registration Workshops or Onsite Training at your facility could be covered by WEDnetPA funding? Contact Lauri Moon to discuss your training needs.
Applications for the Workforce and Economic Development Network PA (WEDnetPA) training reimbursement program for Fiscal Year 2016-17 are now available. Funding is provided through the PA Department of Community and Economic Development (DCED) and administered by 27 WEDnetPA Partners throughout the Commonwealth. The goal of WEDnetPA is to strengthen the business environment of Pennsylvania by providing qualified employers (primarily manufacturing or technology-based businesses) training reimbursement funding for new and existing employees that can improve their skill level and productivity. Companies determine their own training needs and can select among a wide range of training providers (the WEDnetPA partners, third-party providers or in-house staff) as well as how and where the businesses will receive the training (onsite, offsite or online). For more information on WEDnetPA visit www.wednetpa.com or click here.
American manufacturers are investing heavily in digital technologies, pouring 2.6 percent of their annual revenue into digital systems, according to PwC. That investment “is expected to increase to almost 5 percent of revenue in the next five years, an estimated $350 billion,” says the consulting firm.
Venture capital firms have invested $3.6 billion since 2011 in start-ups developing digital technologies for manufacturers. This funding reflects “an increase of nearly 50 percent annually with start-up investment focused on manufacturing software, ERP and inventory software and robotics and sensor technology,” states the consultancy.
Of the manufacturing companies that PwC surveyed, adopting digital manufacturing technologies will lower operating costs by at least 11 percent, “mostly through efficiencies gained by automating processes and production.”
Reprinted with permission from Manufacturing & Technology News.
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Marketing is all about communicating your value to the customer. Unfortunately, many industrial businesses don’t understand the importance of good marketing photos and how the right styling and consistent imagery can help them not only convey quality, but also help them successfully tell their company story and create alignment across their brand.
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