Digital Hubs A Good Start; More Lean Manufacturing Investment Needed!

President Obama officially announced two new advanced manufacturing labs in Chicago and Detroit. These public-private sector partnerships are geared towards helping revitalize U.S. manufacturing prowess. Added to the two existing ones in Youngstown, Ohio and Raleigh, N.C. doubles the total to four throughout the United States. The goals are to help suppliers better collaborate with customers in real time, test their parts digitally and reduce prototype development costs and time expenditures. The Illinois project has been named the Digital Lab for Manufacturing.

This is a good start, but, unfortunately, a lot more needs to be done. After 3 decades of severe manufacturing cutbacks and outsourcing to India and Asia, American manufacturing is only a shell of what it used to be. For example, as I shared in two recent articles: Where Will The Motorola Engineers Go? and How Do You Feel About Lenovo Taking Over? a mega engineering and manufacturing brand built and cultivated in Chicago is being sold to Lenovo leading to most R&D, engineering, scientific, IT and technical jobs exiting to Lenovo’s base of operations in China. For many decades Motorola had been the envy of the world including practically inventing the cellular phone industry. Furthermore, many R&D recruiters, engineering recruiters, scientific recruiters, IT recruiters and technical recruiters like myself made a good living from placements at Motorola. Unfortunately, this now will all be a distant memory.

Moreover, several countries like Germany have long ago embraced this collaborative public-private manufacturing model of targeting specific manufacturing technologies leading to worldwide domination. In fact, Germany now has 67 institutes devoted to worldwide leadership. Through these efforts, they have invested heavily in concentrated worker training for the specific machines and tools they have chosen to spotlight. They have also formed core technical recruiting teams to staff up these institutes with the brightest research & development and manufacturing minds to train their workers in the latest manufacturing techniques.

Two manufacturing areas we should focus more on are Lean manufacturing and continuous improvement.These can provide more immediate manufacturing dividends. Some of the key buzzwords in these fields are Six Sigma, Kaizen, and debottlenecking techniques.

Fortunately, many U.S. companies have already adopted Lean manufacturing and continuous improvement, but a lot more needs to be done. Significant manufacturing improvements can be obtained in a very short period of time by implementing Lean and continuous improvement. Therefore, both areas should be given greater focus with our future public-private sector collaborations. The four digital hubs are a good idea, but focusing more on Lean manufacturing and continuous improvement can produce more immediate return on investment or ROI for U.S. manufacturing.

What are your thoughts?

Comment by Keith D. Halperin on February 27, 2014 at 12:25pm: I think this is a very good start. Countries like Germany have shown that you can maintain a strong manufacturing base when you focus on high-value added products utilizing a well-trained workforce.They've also shown that you can have a harmonious labor/management relationship through institutions like Codetermination (http://en.wikipedia.org/wiki/Codetermination_in_Germany) and Works Councils (http://en.wikipedia.org/wiki/Works_Councils).

The $64Billion question is: who will set up and pay for the (re)training of the workforce?

Comment by Scott Sargis on February 27, 2014 at 2:53pm: Keith,

There are costs to everything. If we do nothing, then it will cost our economy long term as we sick further into the malaise! However, as I suggested, this will be a public-private partnership that will benefit both sectors.

-Scott

Comment by Keith D. Halperin on February 27, 2014 at 5:34pm: I hear and agree. However, something like this would likely require a bi-partisan effort, and until the Wall Street Republicans are able to keep the Tea Party Republicans in the House from obstructing everything that might be done with the Democrats, that's NOT going to happen. In the meantime, as long as our owners (the top 0.1%)continue to do well, the question is: "what malaise"?

No Cheers,

Keith

Comment by Suresh on February 27, 2014 at 5:49pm: I saw this in the news this week, its worth an effort to sort of energize manufacturing in the country, looking forward to seeing how it all works out. Having spent some years in advanced manufacturing and also having been part of many sourcing decisions in the auto industry, it was always about immediate cost savings. If we had stopped to think about longer term effects, some better decisions could have been made.

When we started losing manufacturing, guess what , product design is an iterative process and pretty soon design capabilities can be shipped overseas as well.

These centers should help create a pipeline for machinists, welders, forming, stamping and other critical manufacturing process skill trades and engineers/scientists.

Comment by David Wells on February 27, 2014 at 8:07pm: After 3 decades of severe manufacturing cutbacks and outsourcing to India and Asia, American manufacturing is only a shell of what it used to be.

Not quite Scott. American Manufacturing if measured by output US Manufacturing has more than doubled since the late 1970's. During that time manufacturing jobs have declined by approximately 30%.We are the second largest manufacturer, by output, in the world only second to China. We manufacture that output with 12 million employees, China uses about 100MM. We are still the world leader in terms of aircraft, aircraft parts, pharmaceuticals, lasers and a multitude of other high end products. Now this is 2012 data but feel free to crunch the numbers http://unstats.un.org/unsd/snaama/dnlList.asp Moreover FDI into the manufacturing sector is over 800BB per year much higher than given to any other country.

Manufacturing employment is low due to high productivity and terriblly restrictive policies in the US, I somehow doubt these public/private partnerships will address that. Moreover as often the case once the government has an idea it spends gobs of resources on it, even if the idea does not have any commercial applications.