Blog

STIMS Institute offers its vision of 21st Century Manufacturing.

CEO Dialogue 2I

In a recent CEO Forum organized by MGTL, Dr. K. (Subbu) Subramanian, President STIMS Institute Inc., offered his vision of the 21st Century Manufacturing and outlined the need for requisite work force skills to meet the emerging needs. This forum was held at Pune, India on Nov. 21, 2014. For a complete presentation, please see: Manufacturing in the 21st Century

Few excerpts:

  • “Manufacturing” is a collection of (a) physical processes enabled by a host of (b) information processes and aided by a collection of (c) pick and place and transfer processes, which at the moment are a combination of physical events and information events.
  • Core capability for any manufacturing:  repetitive use of physical processes, to achieve or USE the “Product” at the required quantity, place and time to meet the end user needs.
  • Manufacturers have two options: (a) Steady improvement in the processes already deployed; The result is a constant reduction in the explicit knowledge and skill required with respect to the Physical Processes used. Over time, they have become the black boxes surrounded by a myriad of service processes, which are generic and practiced in all companies and industries. (b) Introduction of a stream of new solutions resulting in New Products, New Processes and New Applications/ USE. These new solutions are the result of intense knowledge of the physical processes unique to the manufacturing company.
  • Breakthrough – step change – solutions will be expected as a routine output of manufacturing professionals of the future. But, in order to sustain such improvements the process has to be managed as a whole – as a system. Constant tweaking or small changes in the system which disturbs the equilibrium of the process cannot be tolerated, if maximum impact is the desired outcome. This will require manufacturing professionals who are simultaneously good at process science as well as process economics, with expertise to integrate knowledge from all available sources.
  • We find two parallel chains operating across all manufacturing companies (i.e.) Supply Chain which deals with the information processes that interconnect the various tiers of manufacturers and Functional Value Chain, where the physical processes and their exploitation play a silent but foundational role across the manufacturers.
  •  Since the products are enables by processes and the USE is also a process in a manner of speaking, we are left with “Process and its knowledge and the capability to manipulate any process” may be the primary core capability or skill set of future manufacturing professionals! The role of human labor and their employment in large numbers is not a critical need in this description of manufacturing. It is important for policy makers to make note of this subtle but significant point.
  • Work force skills required for 21st century manufacturing:

Manufacturing Processes

Traditional Sources of Knowledge

New Knowledge Required

 Traditional Worker Skills

 New Worker Skills Required

   Physical Processes Engineers and shop floor workers with technical training, trade skills and academic education. ·  Process Science·  Diagnostics·  Data and   Analysis·  Sector specific know-how Engineers with years of experience located close to the shop floor operations ·       System Thinkers and Solution Providers Reliant on Process Science·       Reliant on sensors, signals and their use.
 Information Processes Collection of tasks that evolved through the years ·       IT·       Data Base·       Big data·       Analytics White Collar Workers with standard plug and play IT solutions ·       System Thinkers·       Solution Providers·       Customized IT solutions
  Pick and Place / Transfer Processes Industrial work force through many years of training and hands on experience. ·       CNC, Robotics and AGV·       Drones ·       Blue collar workers·       Standard work and tasks·       Physical effort and de-skilled operations. ·       System Thinkers·       Solution Providers·       Comfortable in virtual control environment

Learn to swim against the tide of Binary Economy

http://www.amazon.com/Thriving-Century-Transformational-Technical-Professionals/dp/0791860167/ref=sr_1_1?s=books&ie=UTF8&qid=1371673516&sr=1-1&keywords=Transformational+Skills+Subramanian
http://www.barnesandnoble.com/w/thriving-in-the-21st-century-economy-k-subramanian/1115191210?ean=9780791860168

https://www.asme.org/products/books/thriving-21st-century-economy-transformational

It is an undeniable axiom of globalization: anyone in any job or profession has to be better than anyone else who can do the same job from a pool of workers across the globe. Conversely, those who can do a job in a similar manner to others around the globe will be rewarded for their effort at the lowest value at which the work can be procured from anyone else across the globe! Every worker will fall into one of these two extremes. Anyone in the middle will be ultimately swept to the low-labor-cost pool.
While there will be a natural tendency to be swept into the lower-wage pool, it will require a special effort to swim against the current to be associated with the limited few in the high-wage, high-reward pool. Swim against the stream and reach a high place (of New Solutions with identifiable impact) or be swept away into the global pool of low-cost resources (needed for Replication Solutions) is the true paradigm of globalization. There is little or no opportunity for treading water in this paradigm. This constant struggle to swim upstream and against the current is what is perceived as the volatility and uncertainty in the workplace. Suggestions such as higher education, higher SAT scores, and more grit and perseverance are all means to the same end. But as we have detailed in our book – see the links below – all of these have to be formatted toward identification, development, and exploitation of New Solutions using Transformational Skills as the means to this end.

http://ebooks.asmedigitalcollection.asme.org/book.aspx?bookid=657

Do you know your “core” capability?

Are you the owner of a small or medium sized manufacturing company? Are you the head of a profit center or a Business Unit that is part of a company group? If you are, it is very likely that you are one of the business leaders, trying to find ways to keep your business above water. Some of you may be concerned about growing your bottom line and in rare occasions seeking ways to further grow your business. But, no matter what your needs are, it is certain that you are facing the stiff winds of global competition, cost pressures, challenges from outsourced operations and above all a sense of uncertainty about the future.

We believe that such pessimism and the sense of gloom and doom about manufacturing industries and their future is not warranted. It is true that there are stiff head winds and it is also true that the waters are turbulent. But, you are not up the creek, with out a paddle!

Have you ever sat back and asked yourself, “How did we (your business unit) get here?” No, I do not mean, how you got into a situation of stiff competition and low profit margins and high costs. These are all obvious and readily known to every one. But, have you figured out how your business or operation grew from its beginnings to where it is today? It did not happen by chance or by some luck or through magic! It happened because you and your people along with your suppliers and your customers contributed their share of knowledge and know-how that resulted in the products you manufacture, the processes you use to make them and also the applications know-how through which your customers use your products. The “Products. Processes and Applications knowhow” are your core capabilities. These core capabilities are embedded in the knowledge of many people connected with your company – through your employees, suppliers and customers and their customers.

You might say “It is indeed true that we did not grow out of thin air. We built our company, brick by brick though our products, manufacturing process capabilities and our know-how to help our customers use our products better. Then, whatever happened to my business or operation, over the years? Why are we struggling today with low profitability and shrinking margins and low to no growth?” One can ask such valid questions and wallow in misery or merely be nostalgic about the good old days for ever. Instead, you can muster the passion to dig deeper.

Your product is not any widget you put in your shipping box. It is not merely something you identify by a product number or a bar code. Product is something of value to some one (the user), who is willing to pay you (the manufacturer) something of value to you. Can you describe your “Product” using the above definition? Is there any one in your sales, product design/development, manufacturing/production, tech-support or general management who can describe your product in terms of the value to your customer and the expected value for you in return? Do you know who they are? Do they all have the same understanding of the user value and manufacture’s value or are they speaking over each other in different languages? Your journey for the future can start right here and now, by developing a common definition of your “Product” and developing a core team across the business functions that speaks the same language about your product.

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! All processes in your manufacturing floor have well defined Inputs, which are converted into Outputs. All processes are “Input/Transformation/Output” system. No, we are not talking about Ph.D language. In the past years, few who knew about the process could tweak them and keep them going, while others were simply pairs of hands to help them out. We can not do that any more. All processes can be diagnosed (using proper sensors and IT tools for measurement), repaired, improved and in some cases changed dramatically. But, you can not do any of the above, if you think that the processes in your shop floor are merely “black box” put in place by some one who left the company years ago! Your journey for the future can start right here and now, by developing a common definition of the key “Processes” in your manufacturing floor and developing a system view of these processes across all the business functions that support such processes. You would not like to see any medical professional with out a stethoscope and a thermometer. Then, why would you not want all your manufacturing process professionals have similar capability to measure and diagnose and cure the problem with respect to your processes and their health?

How well do you know your customer’s processes (Application) and how you can add value in their processes through your products? If software is the enabler of all the growth and success in the IT industry, you can make your AT (Applications Technology) as the enabler for your growth and success in the manufacturing industry. AT helps you to build alliances with your suppliers and customers towards building solutions of shared benefits. If you have treated your process as a black box, it is likely that your customers have done the same with their processes. It is about time, you helped them to do a “health check up” on their processes, while they use your product. After all, strong and healthy customer process is essential for your long term strength and success.

Product, Process and Applications know-how are your core capabilities, which got you where you are today! They are the bench strength of your team. You can do more or less with them enabled by all the plug and play IT capabilities. But, you can not build a manufacturing industry with out the brick and mortar (i.e) Product, Process and Applications Technology. Have you taken the time to cultivate them? If not, may be it is time for you and the key personnel in your team to go through the “Core Capability Boot Camp”?

After the march for Science: MAKE AMERICA THINK AGAIN!

I was there at the Boston Common at the march form science. I was one among the thousands in support of Science and its vital role in our way of life. I could not agree more with all that I saw and heard. Yet, one poster got my attention the most:

MAKE AMERICA THINK AGAIN!

Every one who truly believes in Science have to step back and think hard on the cause – why we are here marching for Science? It requires analytical thinking and not merely repeating the slogans or expressing anger against one or the other. Science as it was explained by one speaker requires hypothesis, its validation through data leading to conclusions that help us progress or at least better understand the problem we have on hand. Let us practice this thought process on a few of our problems we face today.

Global warming is indeed a problem. It started when China and India started consuming energy in larger quantities. Their means and methods for energy consumption and the emissions are not new. They rely on the same practiced in the Western world for decades.

How did this explosive energy consumption come to be? It started with off shored manufacturing to produce lower cost goods for the Western world. This local economic activity in developing nations was followed by their consuming the same goods – such as automobiles and energy – in larger quantities. The collective effect of all these is more pollution and emissions and global warming.

The scientists and their supporters who marched yesterday can make a commitment that they will buy only products made through clean energy- no matter where they are manufactured – even if it costs a little more. It is the demand of this consuming public and their sacrifice that will push the politicians and business leaders to switch towards solutions leading to a reduction in global warming? Corporations move and make the right decision only when they are impacted at their pocket book.

But, what technology enabled the off shore manufacturing in droves? One would have to conclude the developments in Digital Technology – internet, e-mail, communication services and Digital data and information processing – and their indiscriminate deployment as one among the enablers. Global capitalism was the intended consequence; Global warming is the unintended consequence.

Recently I was speaking with an engineer implementing an automation project using robotics. I asked him, why are you doing this project? His response without hesitation was “I want to eliminate jobs”. I ventured to ask him if he would do this project if it eliminated the job of his friends, family members or neighbors. He seemed amazed at that question. He responded, “My boss wanted me to do this job”!

Every scientist and STEM worker need to understand causality of the growing economic disparity. Developments in Digital Technology (DT) applied without discrimination leads to smart machines with the potential to marginalize human contributions. Contributions of workers through their cognitive skills, their ability to process information as well as through their physical labor. three pathways for human dignity through work are being challenged today.

Any society with meaningful employment and broad economic prosperity is the employer as well as the consumer. Everyone who marched for Science  must come to grip with this reality (i.e.) their developments in Digital Technology must be channeled for the benefit of all, not for the benefit of a few at the exclusion of the many.

One cannot be in support of Science without also being responsible for the larger scope of their work and consequences of their own actions. This responsibility squarely falls on the shoulders of the leaders in Science community. During the march I informally polled a few to see what they understood as “Technology”. Every one gave similar general answers such as something good for the society, where science plays a key role, etc. Then I asked them if I give you $100,000 what stocks will you buy? Every one instinctively said Google, Microsoft, Facebook, etc. Nobody mentioned GE, P&W, Caterpillar or even Dell or HP! Every scientist needs to ask why is this preference?

Over the past decades the society has begun to accept Digital Technology as the “Technology”. The true meaning of Technology as the integrated outcome of Science, its application (Engineering) and effective exploitation of such use (Management) has been lost in the public discourse. Developments in the field of Nuclear Science are called “Nuclear Technology”. Developments in the field of polymers and plastics are called “Polymer Technology”; Innovation in space exploration is called “Space Technology”. But we obsessively refer to DT as the technology. Then we fail to recognize the developments in DT that preponderantly favor a few workers and their efforts to automate cognitive work and leave majority of citizens of zero economic value.

When thought leaders discuss the societal needs they describe “innovations through Technology” as the savior of the future. Implication here is technology as derived from all fields of sciences and not limited to DT. But when it comes to decision making and risk taking Digital Technology is favored depressing the effect and impact of all other science based technologies. The ills in the abuse of the DT are brushed aside as they are not identified as such.

Society has disdain for the widespread use of Nuclear Technology because of the fear it instills in the mind of the many despite its many positive uses and potentials. But the abusive role of DT enabled smart machines that promote indiscriminate off shoring of processes using energy inefficient and ecologically ill-fated outcomes are not openly addressed. The potential of DT enabled solutions to marginalize human contributions, automating all forms of work (i.e.) Physical, information and cognitive work and leaving society with large swath of citizens without any economic value is not yet fully appreciated and baked into the thinking and planning of thought leaders, large majority of whom are the “Science and engineering” workers.

The role of DT to spread hate and foster home grown terrorists is not met head on. The recent mishap in Facebook and the mild apology from Mr. Zuckerberg is another dimension to this pitfall of the unbridled use of DT. Instead of addressing them head on, they are brushed aside under fallacy and illogical arguments claiming first amendment rights and free speech. An eclectic circuit without proper protection will never be allowed for use by broad public. There are no such restrictions for faulty DT circuits.

Scientists and Engineers cannot merely march and expect solutions to be developed by economists and politicians. They need to start thinking as managers and solution providers and on their own personal roles and through their jobs, projects and outputs that impact the broader issues. Every scientist needs to think as an engineer and a manager and a leader. They cannot wait for someone else to fix the ills of DT dominated society.

Let us Make America Think Again!

 

Meaningful work

Recently I came across the essay titled: “Meaningful work should not be a privilege of the elite” published in the HBR.  The essay starts with the idea of inclusive prosperity (i.e.) wealth generated by the society and / or the economy should be for all to enjoy. Thought leaders and eminent economists are pursuing these three avenues according to the authors:

  • Re-distribute the rewards of the capitalism thus making the 1% pay for the needs of the 99%
  • Emphasis on over all wellbeing rather than merely in terms of economic well being
  • Prosperity in a society is the accumulation of solutions to human problems.

The authors then branch off to state that prosperity should also include engagement in the act of solving problems (i.e.) in the meaningful nature of work.

In all these discussions the macro and micro aspects of work get mixed up leading to perennial confusion and untold challenges to the society at large. For example: “What is the job that society needs to get done that it turns to competent managers to do”? In this sentence “work” has two distinct meanings: The job that the society needs to get done vs. the job that the manager needs to get done.

  • The job that the society needs to get done:

The job of the society – the work to be done – is to understand the need (i.e.) growing economic disparity as well as the cause for it. Developments in Digital Technology (DT) leads to “smart machines with the potential to marginalize human contributions, automating cognitive work and leaving society with hordes of citizens of zero economic value”. Human being can contribute as workers through their cognitive skills, their ability to process information as well as through their physical labor. All these three pathways for human dignity through work are being challenged today. Society needs to innovate as required with new solutions to address this crisis. The society with meaningful employment and broad economic prosperity is the employer as well as the customer.

Unfortunately customers do not hire anyone to address the economic disparity. The workers in this case are the investors in the society whose single minded goal is to increase the return on their investment. As long as they find ways to achieve their better ROI by eliminating labor cost (I.e.) human centered work that already exists or needed in the future, that will be their first choice.  The net result is the “smart machines with the potential to marginalize human contributions, automating cognitive work and leaving society with hordes of citizens of zero economic value”.

The above situation will be reversed if and only if the society at large realizes that its job is not to favor Digital Technology (DT) as the only “Technology”. Developments in the field of Nuclear Science are called “Nuclear Technology”. Developments in polymers and plastics is called “Polymer Technology”; Innovation in space exploration is called “Space Technology”. Society obsessively refers to DT as the only technology. Then the society fails to recognize the preponderant developments in DT that favor a few workers and their efforts to “automate cognitive work and leaving society with hordes of citizens of zero economic value”.

Yet, when the economists and thought leaders discuss the societal needs they describe “innovations through Technology” as the savior of the future, but the implication here is technology as derived from all fields of sciences and not limited to DT. The ills in the abuse of the DT are brushed aside as they are not identified as such. As an analogy recognize the disdain society has for the use of Nuclear Technology because of the fear it instills in the mind of the many despite its many positive uses and potentials. But the abusive role of DT enabled smart machines with the potential to marginalize human contributions, automating all forms of work (i.e.) Physical, information and cognitive work and leaving society with hordes of citizens of zero economic value is not yet fully appreciated and baked into the thinking and planning of economists and other thought leaders.

The first job or work of the society has to be to recognize this dichotomy and restore due emphasis and value for developments and exploitation of all fields of sciences and their impact for a more prosperous society. This will lead to a point of view that world problems and their needs are our opportunities. Mr. Rob Jones makes the following point in his response to the above essay: Discussions of “meaningful work” seldom include examples of “meaningless work.” Which is more meaningful: a STEM educated Microsoft coder building responsive applications for video gaming, or a ditch-digger working to bring water to a drought-stricken region? Which should get paid more? Which will have the longer lasting positive effects? We would all too often identify the coder as privileged and elite, yet also assign that job the comparative “meaningfulness” that clouds our reasoning and judgment on the nature of given work and its value. That is why hunger, thirst and poverty abound, alongside obesity and gaming addictions. To solve the problem of hunger, thirst and poverty, eventually someone is going to have to pick up a shovel. That’s pretty much what university level work design should teach…and require

  • The job that the managers need to get done:

Not every manager is an economist or thought leader. Every manager is a hired hand to get the job done. They should certainly strive hard to deploy the “increasingly capable machines that enable and empower people to collaborate more effectively, and make learning from experience scalable.”

They should also remind innovators who work for them of the importance of remembering the essential “job to be done” by their offerings – what is it that customers “hire” your product or service to do for them? Their job is not only to produce better goods and services more efficiently, but to organize individuals to collaborate and create together in unprecedented ways.  The business leaders who get that job done will be those who make the most of human potential, and manage to make prosperity inclusive.

In the DT enabled world is there really a distinction between a manager and worker? Aren’t they merely part of a chain or continuum? May be both the manager and the worker need to start thinking that they are part of the same “system”. In fact in a DT dominated world where  the use and value of every worker is threatened, may be it is better for all workers and at all levels to start thinking of themselves as Technology workers, where “Technology” truly means integration of Science, application of Science (Engineering) and exploitation of Science (Management) in every field. For such workers and pool of workers, the opportunities for meaningful work are limitless. Such workers also become very competent in their Transformational Skills.

System Thinking and Transformational Skills: the basics for Courage and Empathy

In a recent article titled Job stealing robots? Millenials see hope, fear in Automation, Cathy Englebert, CEO at Deloit writes: “I told him: “Don’t worry—I’ve never met a machine with courage and empathy.””

But will Cathy’s empathetic assurance be true in the near future as Robots are being developed to show empathy and care for sick patients and elderly! Robots with empathy are being developed for personal care and yes even replace a loved one!

In our opinion courage and empathy have to start at CEO level.

Sr. managers and executives interested in their bottom line at all cost replace human centered activities with machine – robots, drones and AI – centered activities. Before they take on the next project they need to think: Is this project to replace hundreds of workers really necessary? Are there alternatives where human employment can co-exist with efficiency and cost reduction?

But such empathetic view can not start with one CEO or Sr. executive. It requires collective wisdom that people without jobs – and decent wages – may end up being the angry mob, the enemy of any society. The irrational outcomes in the recent Presidential election is a clear example of what can go wrong when larger sections of the society do not see any hope in their future.

Such empathy also has to start with the public at large. We see self-check out at large supermarkets and mega-stores. One can not be sure if the cost reduction by eliminating a few workers at the check out counters are being passed on to the consumers. Assuming that to be the case, does any one in the public at large think that they would forego the few cents cheaper price on the items and insist that the jobs at the check out counters be replaced?

Recently I was speaking with a young engineer who was working on a Robot application project. I asked him, “Why are you working on this project?”. He promptly replied, “I need to eliminate X no. of jobs”. I asked him “What happens if the people who loose the jobs are your friends and relatives or neighbors?” He was shocked and dumb founded. Robots do have a place for better safety, consistency, eliminate worker fatigue, etc. But implementing robots merely as cost reduction devices and to eliminate human centered work lacks empathy and courage.

These are the kind of “cooperation between humans“that we need today in every sphere of activity, if we don’t want to become a mere machine, robot, and AI dominated society.

It  also requires higher efficiency and greater impact per person. Today when computers and systems can do everything — read, write, document, compute, analyze and decide – and augmented with these capabilities they can replace much of the human centered capabilities, it is incumbent on all of us to find ways to enhance the skills of our people to face this on onslaught and come out ahead. This challenge and need may be the untold thousand lb. Gorilla in the room for education at all levels and HR development.  These needs have to be overcome through sustained education and pratice of System Thinking and Transformational Skills.

For more details:

https://stimsinstitute.com/2016/05/23/do-americans-really-miss-the-unions/ https://stimsinstitute.files.wordpress.com/2014/04/transformational-skills_article-based-on-book_15-jan-2014.pdf

Developing a framework for Industry – Academia collaboration : A case study

Slide1

Education & Training NGPG EM Mar 2017

To address the limited capability among Indian machine tool manufacturers to produce high precision machines, a model on Next Generation Precision Grinder (NGPG) has been developed. This project also illustrates the development of a collaboration frame work to integrate the expertise available with the Indian machine tool manufacturers, academic resources, etc with the knowledge available from across the globe.

Key lessons learned:

  1. Cooperative R&D is entirely possible between industry and academic/R&D institutions in India as long as everyone is focused on the same common goal (i.e.) advancement of academic knowledge that supports commercially viable end results.
  2. Such an approach is most appropriate for medium to long term R&D projects (3-5 years), not those requiring immediate development.
  3. At higher reaches of technology, the scientific inputs can only be brought by academia, since industry – especially the SMEs – mostly does not have the needed resources.
  4. There are tools and resources available from Govt. funded agencies that could be deployed by students and industry professionals. Developing such eco-system enhances efficiency and reduces the total cost and investments needed in such projects.
  5. A structured project with system thinking leading to clearly laid down quantified objectives stands a good chance of success.
  6. There must be a driver each from industry and academia, who make it their personal mission to complete the project successfully.
  7. 7. It is essential for the industry and academic institution to continuously interact and jointly work on the project at every stage. Such collaboration also benefits from engagement of organizations, such as IMTMA and international experts in knowledge integration.
  8. A free exchange of information and data is essential, without being worried about Intellectual Property (IP) confidentiality at every stage. This can be secured through a mutual Non-Disclosure Agreement (NDA) at the start.
  9. If properly reviewed and managed periodically (as by the PRMC), it is possible to complete such projects within the time and budget allotted.

Reflecting on the views of Larry Summers, Bill Gates and Basic Living Income.

In a recent opinion article in Washington Post article titled “Picking on robots won’t deal with job destruction“, Mr. Larry Summers argues against the tax on robots proposed by Mr. Bill Gates as a away to counter the effect of Robots on unemployment and declining wages.

There is half truth in these opinions of both these eminent leaders! We need an approach that combines them. Here are some suggestions:

The role of IT (Digital technology in general) has been to replace human centered activities through information and physical labor by “machines” that can standardize information processing (Microsoft products!) and their applications. Hence machines can read, write, compute, analyze and make decisions as well as move objects locally (Robots) or over distances (Drones), etc. This leaves only low wage jobs – REPLICATION SOLUTIONS – that are standardized and de-skilled. Only these jobs have been growing and hence the noted low unemployment without wage growth in the recent years.  https://stimsinstitute.com/2016/05/23/do-americans…
These Replication Solutions leads to a large no.of jobs that need no skills and hence no education in many cases. These are also the jobs that can be automated, outsourced and de-localized. The large majority of manufacturing jobs that have been lost – and which are not coming back – belong to this category.

This new economy also leaves room for a small no. of jobs – which every one is clamoring for – with better wages, where new skills to conceive, develop and deploy NEW SOLUTIONS.

This is the BINARY ECONOMY that has been evolving across the globe for the past four decades. https://stimsinstitute.com/20151207books/

The few jobs that require a constant stream of New Solutions need “major reforms of education and retraining systems” as suggested by Mr. Summers. We need to recognize this much needed education as a combination of academic education, hands on training and formalized education/training on System Thinking and Transformational Skills. 

Mr. Summer’s proposal for better education, etc. are part of the set of well known solutions. Proposals by Mr. Sanders for free college tuition for all gained traction during the recent POTUS election. But, Mr. Sanders or his campaign never addressed the question of creating more new jobs to employ all the new graduates (albeit without student loans). Proposals by Secretary Clinton were modest and more in terms of promoting vocational education and hands on training in addition to free tuition at public colleges. But this would have been like staying afloat in the current stream with out creating new jobs in massive numbers needed to offset the effect of DT, IT, AI, Robots and Drones.

Republicans have advanced promises of massive infrastructure spending, “bringing back mfg. jobs” by renegotiating trade treaties and accelerated GDP growth through massive tax cuts mostly for the businesses and the rich. U.S. voters have signed up for these policies for a minimum of two years if not four years. Promises like these are based on the assumption that jobs have been merely displaced outside the country and are readily available to be brought back. This assumption seems counter to the realities of the Binary Economy outlined above and the constant and progressive role of DT, IT, AI, Robots and Drones to deplete the human centered jobs.

We need job creation at a rate much faster than they are depleted. Also what happens when you are well educated and trained and you don’t have jobs since, AI, IT and Robots and drones have taken away most jobsda that humans can do?  Higher and better education may not be all the answer we need as proposed by Mr. Summers.

Also how do you create more no. of well paying jobs and how to fund them are the unanswered questions? You can not create more jobs by simply making existing jobs more efficient and productive through IT and Robots — this has been the case for the past four decades – with what is left leading to large no. of low wage deskilled worker needs.

We need to create  more jobs for humans than we deplete through AI, IT, Robots and Drones. These jobs can come if America as a global leader thinks “World and humanity’s needs and opportunities are U.S. Opportunities”.

New Jobs with good wages will come only when we invest massively to solve existing problems of the humanity and new opportunities for human kind looking across the globe. We need to think beyond looking at Manufacturing as the job creation engine. https://stimsinstitute.com/2016/12/11/restoring-ma…  This requires few clear objectives:

  • Recognize that Technology is not “IT” alone as perceived in common language today. Instead TECHNOLOGY is the exploitation of SCIENCE, ENGINEERING and MANAGEMENT in all areas of studies and exploration.
  • Relentlessly foster all sciences and their technologies that can create NEW SOLUTIONS that meet the unmet needs of humanity and creating new ways for betterment of humanity across the globe.
  • Focus away from the use of IT and AI technologies  solely on eliminating human centered efforts and more towards creating new opportunities for human endeavor (work or jobs).

But this will require large investments. Such investments have to come from Government initiatives – such as the NASA program to put the man on the moon.  Suggestions that such massive investments for new explorations have to be driven by private sector seems flawed based on our experience over the past four decades. Private sector and investors have the singular goal to maximize their returns while minimizing the risk in that process. This invariably drives the focus towards “Replication Solutions” of the known rather than exploration of the unknown to conceive and create “New Solutions”.

Where will the money come for this? It has to come from those who are the beneficiaries of the current IT and DT revolutions. This can come in the form of

  • Higher taxes for the top 1%. This will require a break in the tax policies of the Republican leaders.
  • It can also come from a smaller tax through the beneficiaries of IT revolution – most of whom will be the customers of Bill Gates IT empire.
    • This will include beneficiaries like myself, Mr. Summers and Mr. Gates who can write and post our views on line for millions to read with minimal marginal cost!
  • In the end some revenue can from   investors who merely replace current jobs with robots as suggested by Mr. Bill Gates.

The worst solution is a living income pay out for all citizens as proposed in some European countries. Example: Finland to consider introducing universal basic income in 2017. Similar proposals have been floated in other countries as well. That may be the killer of “Self Esteem” and the worst outcome in nurturing the creativity and drive of the human spirit. One could equal argue why bother about the human spirit when human body is wasted through unemployment and poverty? The fact we have to ask this question at the beginning of 21st century is a sad commentary of our evolution in technology and their unbridled use for the benefit of the few at the expense if the many in the past four decades.

 

Restoring Manufacturing as a job creation engine.

slide1

President elect Donald Trump’s efforts to shine light on Carrier Co. and their limitation of jobs might have one silver lining, although it may not be what he seems to suggest (i.e.) he as the POTUS can retore US manufacturing jobs. It is reported that  Carrier Co. to ultimately cut some of jobs Trump saved

The company’s deal with President-elect Donald Trump to keep a furnace plant from moving to Mexico also calls for a $16 million investment in the facility. But that has a big down side for some of the workers in Indianapolis. Most of that money will be invested in automation said to Greg Hayes, CEO of United Technologies, Carrier’s corporate parent. And that automation will replace some of the jobs that were just saved. “We’re going to…automate to drive the cost down so that we can continue to be competitive,” he said on an interview on CNBC earlier this week. “Is it as cheap as moving to Mexico with lower cost labor? No. But we will make that plant competitive just because we’ll make the capital investments there. But what that ultimately means is there will be fewer jobs.”

We have described in detail this migration and transformation of the “Manufacturing work” in one of our earlier blog posts under the title “How to bring the manufacturing jobs that are never coming back”. It cannot be achieved merely by blaming Trade Agreements or past government policies. Certainly it cannot be achieved merely by blaming the CEOs of Carrier or Being Co. or the union leaders that Mr. Trump thinks of as his whipping boys for the day.

“You can’t just blame cheap labor [outside the U.S.],” said Dan Miklovic, principal analyst with LNS research. “Certainly many of the jobs that we’ve lost, especially in more sophisticated industries, it’s not so much that they’ve been offshored, but it has been automation that replaced them. We use a lot more robots to build cars.” Altogether, U.S. factories are actually producing more products today than they did in the post-World War II era, according to the Federal Reserve’s reading on manufacturing output. Output at U.S. factories is up 150% in last 40 years. But U.S. manufacturing jobs have plunged by more than 30% in that same period. And automation is a big reason why.

The above suggests that the US labor has been producing 50% more output with 30% less labor. A simple math would suggest that US labor has been doing such a good job that the manufacturing labor productivity has gone up by 114% (= 150% output put with only 70% of labor needed). But to gain even more employment at this higher level of productivity US will need to produce and sell 214% more than we did 40 years ago! Unless these products can be consumed inside of USA at the current prevailing prices the US will be required to sell them to other countries. How can this be achieved with the Trump administration’s position opposing Trade agreements? Senator Sanders has been equal contributor to this fallacy.

Let us be clear about something else. Not all of these productivity gains have come thanks only to better worker skills. If that were the case the workers can walk out of their jobs and the manufacturing plants will come to a screeching halt. That was the power of the labor 40 years ago and hence the strength of the unions. That is not the case today. We discuss this point in more detail in our essay: Do Americans really miss the unions? It is true that few workers are better skilled and contribute far better than their peers 40 years ago. These are also the among the college educated workers – with minimum of associate degree from Community colleges – working mostly in the two coasts and the few newly industrialized manufacturing centers in the South and the Midwest. These are not the voters in the industrial mid-west without higher education (or even H.S. Degree). These “higher skilled” workers are not large in number or concentrated in a few places to have the strength necessary to force higher wages through unions and their demands. The challenge is to train and educate more of these skilled workers so that they can acquire and maintain higher paying manufacturing jobs on their own. This is not more of the same education leading to the suggestion from a professor of Chemistry “It may be a mistake to get a degree in Chemistry, unless you have also figured out how to use your knowledge!”

There is no end in sight in this trend in automation and depletion of manufacturing jobs. Anyone who pushes the idea that they can reverse this trend and grow lots of manufacturing jobs in the US merely through trade barriers or building isolationist policies  is selling you another Trump University!

 And it’s not a trend that’s going to end with Carrier or even with manufacturers. A recent study by McKinsey & Co. said that 45% of the tasks that U.S. workers are currently paid to perform can be automated by existing technology. That represents about $2 trillion in annual wages.

If you take the above data and through simple math one can conclude that the US manufacturing has to reach 400% of our production output to maintain employment parity that existed 40 years ago. This does not take into account additional increase required to account for our modest population growth.  This also does not take into account additional developments through Digital Technology for further automation. Information technology, which will continue to deplete the need for manufacturing labor.

Where will this new production come from? It cannot come by simply producing more of the same. 400% of manufacturing production in US over 40 years ago would suggest that all manufactured goods are made in US and everyone else in the world will merely but what we make! This Utopian view of the world is foolish at best. Hence it implies US has to conceive and produce goods and services for the unmet needs that other countries can not produce today.

These unmet needs to be full filled can be for consumption in the US and better yet for all the unmet needs across the globe. This has to start with our redefining the commonly used term “Technology”. Everyone in the media, leadership, think tanks make the same mistake by addressing developments in IT (Broadly in the category of Digital Information Technology) as the Technology.  Look at the parent Co. of Carrier (i.e.) United Technologies. The word technology here refers to jet engines and air conditioners. It does not imply IT in isolation. For more details see: Managing the role of Digital Technology: Life before and after electricity.

Why is this important? There has been relentless effort to improve and enhance the efficiency and productivity of human centered activities in the past 40 years using IT / DT. Progress in automation and AI are merely focused for furtherance of the same. The resultant depletion of human center activities (jobs) are being lost at a far larger arte than any new jobs being created. For more details see: Understanding the voter resentment. The only way to reverse this trend is to emphasize as a nation – and across the globe – the need to focus on

  • Relentlessly foster all sciences and their technologies that can create NEW SOLUTIONS that meet the unmet needs across the globe.

This implies that products and services for alternative energy, high speed transport across the US, solutions to fight global warming, exploring the space. eliminating poverty, hunger and poor health, products and services for the growing old age population, etc. are not mere matters of policy and political debate. Instead these are real opportunities for new products and services not available from other countries. These are also new business opportunities for the investors. In combination these are the manufacturing activities that can create net new jobs in the US.

The need for such expansive role of new science based initiatives (the true meaning of the word “Technology”) is not fully recognized. For more details see: Dwindling gains in Science, medicine and technology in the WSJ article.

But the WSJ report suggests that we the US population is some how risk averse. This is far from the truth. When the new technology is an acceptable alternative US as nation is the first to accept the risk and embrace the change. But these businesses and services based on new science based technologies will not take off without substantial initial investments to foster them through Government initiatives.    We should be honest to admit that US auto industry would not have succeeded without the Highways and freeways built across the nation by the US Govt. The same auto industry would not be viable today without the Govt. intervention of the 2008 financial crisis. The same can be said of aerospace industry and the role of government funded defense contracts supporting many basic research projects.

  • Focus away from the use of IT and AI technologies  solely on eliminating human centered efforts and more towards creating new opportunities for human endeavor (work or jobs).

Our reliance on IT to reduce jobs and increase labor productivity has been the untold “Opioid crisis” in all our economic activities. It was prescribed as a solution to over the labor cost issues in the late 1970s. Now it has become the crutch and the only medicine consumed by CEOs across all companies and in all sectors to reduce labor cost year after year to keep their balance sheet look attractive to their investors.

The above two prescriptions for increasing the manufacturing employment have to become the corner stone of any policy advocates as well as the fundamentals for any administration that truly believes in restoring US manufacturing and increased jobs as a result.

Reagan, Clinton and Bush administrations complexly missed the boat in terms of the above two prescriptions. Republican ideologues who want to keep Government out of everything they see as  interfering with “free market economy”have thwarted most of President Obama’s efforts in this direction, every step of the way. Democrats who see the need are not clear in their vision or vocal to articulate the need for real growth in new jobs. Instead they offer platitudes in terms of free college education and more manufacturing jobs (without a clue on where they will come from).

The CEOs have also a role to play. After all they can not continue to cut  jobs and look good in their bottom line in the long run.  Recall the comment by the CEO of Carrier Co. quoted earlier? “We’re going to…automate to drive the cost down so that we can continue to be competitive”. He did not suggest investing in more new products and services that can increase employment and also improve his company’s performance bottom line in the long term!

If the policy planners and administration will come to such consensus is anybody’s guess. In the meantime individuals should take the matter of their jobs and careers in their own hands and develop strategies for the same on their own. Transformational Skills for success in the 21st Century Economy.

Comment on HBR Article: Think Strategically About Your Career Development

The HBR article on the above subject suggests the following as important steps for career development:

  • Get clear on your next steps.
  • Force yourself to set aside time.
  • Invest in deep work.
  • Build your external reputation.

Of these four suggestions it is very important to “Invest in Deep Work”. Before (and during) such focus one should be clear about Why/ What? and How? about the Deep Work.

Why Deep Work: As the author of the HBR article says you have to do something different from others. If you do the same work as others then there are more people competing for your career path. Chances are the co. will find a way to standardize your jobs and eliminate a few people or outsource them :-(

What is Deep Work? It is the ability to identify a need, convert it into a solution and make it useful (and be sure you get paid for that). We call this ability (Discover X Develop X Deploy) to implement a stream of new solutions as the TRANSFORMATIONAL SKILLS.
https://stimsinstitute.com/20151207books/ 

How to engage in Deep Work? Here are are seven path ways (Transformational Skills):
1. Develop a common language (What is the NEW SOLUTION? Why/ How?)
2. Focus on using all your core capabilities (Knowledge, Experience and People Skills; Science, Engineering and Management skills); Constantly add to these six skill buckets through life long learning as needed.
3. Practice a system view for all solutions (Task is what you do; System is what you develop). Every system is an Input / Transformation/Output scheme. Keep in mind that the whole is always larger than the mere sum of its parts. You are required to complete an entire jig saw puzzle( the new solution) and not just fit one piece in it.
4. Focus on the SCIENCE (Quantitative understanding and use of the Transformation); Use Digital and Mobile data as much as possible.
5. In developing and implementing the solution reach out and use a broad network of resources and clients. This is called networking in general. It is more specifically called as Ecosystem development, since everyone in the network feeds off of each other for their collective success and growth.
6. Be motivated to go from beginning all the way to the end (= Discovery X Development X Deploy)
7. Practice Emotional Intelligence (Be useful to others which in turn can be useful to you).
https://stimsinstitute.com/2016/03/18/urgent-need-for-education-that-addresses-the-real-needknowledge-and-its-use-to-deliver-solutions-that-commands-better-wages/

Building a career where you are seen as useful is always much easier than simply chasing ideas and connections. It is not easy. It will need you to set aside time and effort to gain clarity on your new solutions and the value through them. There will always be pressure to do a lot of tasks unless you set aside time to step out of them and think clearly to work on the above sevenn steps.

If you build your external reputation when you are not seen as valuable in your current employer that may get you a new job, but it will not be a solid base for building your career path.