Tuesday, November 16, 2010

Rodney Dangerfield and American Manufacturing

Below is an article I wrote for the IMTS Insider.

Rodney Dangerfield and American Manufacturing

Twenty-one percent of everything made in the world is made in the United States of America.  China makes 12%. Surprised? Probably not, if you are reading the IMTS Insider, because likely that means you are in manufacturing.  However, I bet if you asked individuals outside the industry which country leads the world in manufacturing, their answer would likely be China.  You then might get into a long discussion about the price of labor and politics. But that is not the point of this article. This article was sparked by a recent NPR Planet Money podcast called The Friday Podcast: Buttons And Other Connectors.
I would encourage everyone to listen to this short podcast because it drives home a very simple point that is sometimes forgotten in manufacturing; it is NOT lean manufacturing, it is innovative technology. Don't get me wrong, the principles of lean are important, but if you are not innovating, being lean is simply a race to the bottom. How much do you spend on R&D? It always blows my mind when I hear someone in manufacturing say that there is not a lot to be gained by investing in R&D. 
The podcast compares and contrasts two companies.  As NPR states on their Planet Money home page:
“Back in the day, the Buttonwood Corporation ran double shifts at its New York City factory, with 150 machines cranking out tens of thousands of buttons.  These days, Chinese factories not only have cheaper labor, but also newer, fancier machines. Buttonwood — a family business, owned by two brothers — has just one employee left. They sell small orders of wood buttons, and take orders online at woodbuttons.com.
The Zierick Manufacturing Corporation makes products that are all around us, but we never notice: little pieces of metal that connect electronics components to control panels.  This sounds like the kind of cheap commodity item that would be made in China. But it isn't; Zierick's factory is in upstate New York. Zierick's trick is to keep coming up with new, patentable ideas to make connectors better and better. So if you want a really good, reliable connector, it's worth it to pay more and get one from them. The company's doing well.They have lots of employees, lots of customers. They just have to keep coming up with new ideas to stay ahead of everybody else.”
Why do I have Rodney Dangerfield in my title?  The companies that are innovating and growing do not get the respect they deserve because most people believe “American manufacturing is dead.”  In today's sound bite news world, this is not surprising. Tell your non-manufacturing friends who is winning and why in manufacturing.  Finally, when you listen to this podcast, you can see the difference between someone who is looking forward and innovating and someone who is looking at years gone by.  Sometimes you are the windshield and sometimes you're the bug.  Innovate and be the windshield: It’s much better that way.
Dave Edstrom
Director, The Office of Strategic Innovation 
AMT - The Association For Manufacturing Technology

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