“Automotive industry is doing well in the USA; Detroit goes bankrupt” – What does it tell us about the claimed resurgence of manufacturing in USA?

Mfg Engg view point article 07 31 13

Dr. K. (Subbu) Subramanian, Fellow – SME, is the President of STIMS Institute Inc. www.STIMSInstitute.com. His company specializes in growth strategies and innovation for industrial manufacturing companies and education / training for mid-career professionals and their development. After graduating from MIT, he has worked across the globe in the manufacturing sector for over 34 years. His new book, “Thriving in the 21st Century Economy: Transformational Skills for Technical Professionals” is co-authored by Prof. Srinivasa Rangan.

Automotive industry is doing well in the USA; Detroit goes bankrupt” – What does it tell us about the claimed resurgence of manufacturing in USA?

In the past, there was a close connection between the innovators and investors. Both of them lived and worked in the same place like Detroit. The role of investors and innovators was inseparable and inter-mingled. Today, the roles of investors and innovators have been separated.

Innovators are those who Discover, Develop and Deploy a stream of new solutions of added value. These end to end innovators displayed unique Transformational Skills to render new ideas into reality. Their impact also helped the community around them flourish. While they relied largely on local resources, the financial fruits of their labor was also shared and enjoyed by the community around them. They also invested their rewards for further growth of the community. As a result Detroit flourished.

The innovators and their Transformational Skills are needed today as well. To identify a need as an “opportunity,” frame that as a solution in a comprehensive manner (as an input/transformation/output system), and execute that to completion is the need today as much as it was in the hay days of Detroit. The reach for resources across the globe as well seeking out customers across the globe is a great boon for all innovators.

While the innovators live and work in the main streets, the investors now work in the Wall Street. The investors also live (or at least park their wealth) across the globe. The focus of the investors on their needs vs. the need to focus on the community around them has also been separated. These divergences have been evolving for the past four decades. “Let Detroit go bankrupt” was the slogan. Now Detroit is indeed bankrupt!

What are the lessons to be learned, If you are a manufacturer?

Do not wait for some investor to tell you what you are good at? Do not wait for someone to define what “Manufacturing” is? Products, Processes and Applications knowhow are your core capabilities, which are embedded in the knowledge of many people connected with your company – through your employees, suppliers and customers and their customers. These three core capabilities and the value exploited through them is manufacturing.

Product is something of value to someone (the user), who is willing to pay you (the manufacturer) the value you deserve.

How well do you know your Processes to manufacture your products? They are not “black box” that nobody knows anything about, after Joe Smith retires from the company! They are not merely SAP, ERP, MRP or any of the myriad of IT driven tools. All processes are “Input/Transformation/Output” systems. In the past years, the few who knew about the physics of the process intuitively could tweak them and keep them going, while others were simply pairs of hands to help them out. You can no longer think like that.

You would not like to see any medical professional without a stethoscope and a thermometer. Then, why would you not want all your manufacturing process professionals – your employees as well as suppliers and customers – have similar capability to measure and diagnose and cure the problems with respect to all the manufacturing processes and their health?

How well do you know your customer’s processes (Application) and how can you add value in their processes through your products? You can make your Applications Technology (AT) the enabler for your growth and success in the manufacturing industry, just as you have IT solutions providers for your computers and IT systems. It is about time, you helped your customers in a “health checkup” on their processes, while they use your product. After all, strong and healthy customer processes are essential for your long term strength and success.

Product, Process and Applications know-how are your core capabilities. They are the bench strength of your team. Build your bench strength and then you can do more with them enabled by all the plug and play IT capabilities. Your journey for the future can start right here and now, by developing a common definition of your “Product” and the key “Physical Processes” that enable your product, as well as the “Applications”. Then develop a system view to study and manage these core capabilities across all your business functions that support them. Build further alliances based on these core capabilities with your customers and suppliers. Let this manufacturing eco-system flourish. If you do, then Detroit along with others will also flourish.

You certainly need investors to help you out. But, you cannot build a manufacturing industry without the brick and mortar (i.e) Product, Process and Applications Technology. Have you taken the time to cultivate the manufacturing eco-system based on these core capabilities? The alternative is to repeat the history of Detroit in many other cities and communities in the USA.