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Rebranding Manufacturing - Roundtable: Manufacturing at a Crossroad

Posted By David Brousell, November 16, 2010 at 11:30 AM, in Category: ML Council

photo-council-office.jpgFounding members of Manufacturing Executive’s new Leadership Council Board gathered together for the first time in May at Managing Automation Media’s 2010 Manufacturing Leadership Summit in Palm Beach, FL. Their mission: to set a groundbreaking leadership agenda of critical issues to help create a better future for global manufacturing. These are some of the highlights from the first roundtable debate on one of those critical issues: the rebranding of manufacturing.

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Brousell:
#We believe very strongly that manufacturing is at a pivotal point in its history and evolution, and that globalization, changing demographics, new talent, and the strategic role of information technology are all changing the manufacturing ecosystem.

Manufacturing leaders have to change, too. It’s time for a new definition of leadership, for new skills to be developed, and for new technology tools to help connect people so we can do things differently and look with fresh eyes at what it’s going to take to move manufacturing forward into the future.

Today we want to start a new debate around these key issues facing our industry. We want to explore some of the trends that are redefining our industry and help develop new ideas about what leadership means for all of us.

This is just the start of the conversation. The first issue we want to address is the global image of manufacturing as an industry. How do we now re-energize and rebrand manufacturing so it is justly recognized as a key foundation for economic and social growth around the world?

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Packer:
Rebranding, in my mind, is about enhancing the image of manufacturing to achieve a number of things. One is clearly to attract the best and brightest people. We need to make it more attractive as a profession, at the earliest stages in educational development, so that people can aspire to the profession of manufacturing, whether it’s at a craftsman level, at a professional level, or at a leadership level.

Manufacturing is a valuable career. But we’ve lost this understanding over the years. A lot of this is due to the manufacturing sector itself, with its smokestack images and those kinds of things. They call it rebranding, but there’s really an educational perspective of what manufacturing is and will be in the future. It isn’t a smokestack industry, although there are still smokestack sectors. But even those, if they’re going to be sustainable, have to be revamped and overhauled.

The other key point here is the workforce. Quite frankly, the big piece that keeps me awake is just getting the workforce we need in the future. There’s an urgency associated with this across the industry. The current workforce is going to start exiting, whether it’s to the next stage of their life in retirement, or career shifts, or whatever it happens to be.

So, there’s kind of yin and yang here. How do we keep them long enough to coach, mentor, and teach the next generation? And how do we also accelerate the preparation of the next generation of professionals and leaders?

Brousell: Will you need a lot of new people over the next 10 years in your company?

Packer: Yes, in the next 10 years we’re going to need around 100,000 new engineering and scientist hires across the board — in product development, manufacturing development, and beyond. One, it’s an enormous recruiting challenge; and two, it’s an enormous influx to assimilate and teach without smothering them — letting the innovations flow out of them, but within safe-haven boundaries so that we don’t screw up the business, screw up the industry, or screw up their careers. The volume of this challenge is something we’ve not faced before because of the demographic change.

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Manenti:
I think that rebranding is essential. Apart from the issue of an aging workforce, there is already a skills gap. Young people are not being attracted to manufacturing, because they feel it is a staid and dirty place, and not a fashionable place to work. I think that information technology can help in this because a younger guy can now get attracted to work where there are some kinds of social media, or some new technology, or if he can use an iPod or whatever. But the manufacturing industry is a place today where all these things are not there — not yet. So I think new technology could really help.

The other point is about governments. I think governments are struggling to finally understand the value of manufacturing transformation. In the past, it wasn’t like that, because manufacturing was not considered something really fashionable. So, I think we need to change this perspective. Interestingly, if you look at the European Commission’s latest recovery package after the recent financial industry collapse, it included a big focus on the manufacturing industry and how it can become more sustainable in Europe. I think things are now moving in that direction.

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Lapide:
Actually, we had a discussion about three years ago at a previous Summit. There were a couple of things. One is that basically nobody raises their kids to work in a plant these days. The so-called greatest generation we’ve ever had (and I’m a baby boomer, too) raised us with manufacturing jobs all around us, but they told us not to go into manufacturing. That’s the first issue. We’ve got to get positioned where there is dignity in manufacturing. When we talked about it three years ago, we said that maybe we should rebrand to something like “supply chain.”

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Serpico:
I agree 100%. We had a long discussion about the word “manufacturing” in L’Oréal. Two years ago, we reorganized and called it “operations” because we wanted to expand greatly the product cycle from the beginning to the end and provide a career opportunity for people that’s just outside of the plant. It’s an enormous plus in selling outsiders to join our company.

Lapide: A little over 20 years ago, we at MIT created the Leaders for Manufacturing program. Basically, the premise was to have an educational program that produced an MBA plus an engineering degree focused on manufacturing. For the last 20 years, the university struggled with the graduates. They trained them to go into manufacturing, but many of them went into financial capital or consulting. MIT last year changed the name of the program. It’s now called Leaders for Global Operations. I think that’s a key point.

Brousell: So what should we mean when we now talk about manufacturing?

Lapide: When we talk about manufacturing, are we talking primarily about making stuff or are we talking about both making and delivering? The bigger story here is, in fact, the supply chain. So here’s the way trends are going. If you look at the aging population, we don’t like to buy products. We like to buy solutions. A solution to me is not just a product. It’s also the service that’s around the product. The question becomes, when we talk about manufacturing, are we really talking about operations management? Can you manufacture service? Sure, you can manufacture service. Service is also a product, and, therefore, it can be viewed as manufacturing a product even though you can’t physically touch it. That’s part of this rebranding. The U.S. and a lot of developed nations have moved more and more into services. Do we have a bigger picture called “operations”? That’s one thing you’ve got to think about. That’s part of the branding. But I think the branding eventually has to be that manufacturing can’t be a four-letter word anymore — it’s not just “make.”

Serpico: I think your point about manufacturing being only about the plant is true. We squeeze the blood out of stone in manufacturing in terms of getting every penny out, when in reality the savings could be across, outside of manufacturing per se, to the supply chain. There’s lower-hanging fruit and bigger return on the investment other than squeezing more of the manufacturing people who already feel squeezed to death. If you allow them to creativity look across the boundary and to move people between supply chain jobs and product development jobs, it’s an enormous plus.

Brousell: It’s interesting because in Europe the word “manufacturing” often means discrete manufacturing, as opposed to process manufacturing. So, there’s even confusion around that. It’s a semantic distinction, but it’s a big one in a lot of people’s minds.

Serpico: Even recruiting at a university, you have to be careful. It means a lot more to go into an engineering school and talk about an operations position, rather than a manufacturing position.

Brousell: At Manufacturing Executive, we have always used the word “manufacturing” to mean the entire set of functions that run a manufacturing enterprise in a company, everything from administration to customer service, financial, product development, and design, production and assembly, materials procurement, supply chain, logistics, warehousing, customer service. To us, that has been the definition of manufacturing. We have not localized it just to one function.

Serpico: This also touches on other key points, such as outsourcing manufacturing. If you don’t look at the entire picture, you can make the wrong decision. International production versus domestic production — it’s the same issue. If you’re not looking at the whole supply chain, you could make the wrong decision.

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Lee:
I think the discussion is not just about a mind-set, but also redefining the meaning of manufacturing. In the past, we defined manufacturing as a process of just making things. You have raw materials; you’ve got all kinds of production stuff, machinery, whatever; and then a thing is created, a product. That’s the old view of manufacturing: machines and materials, machines, and methods.

Now we are talking about a process of making things happen. Just add one word. That means, from one perspective, you have to have all the right tools and focus on key issues, like predictability, “produce-ability,” and productivity. Then at another level you need to know who can make it. Where? How do you connect the right resources? Who are the right customers who will buy the product? So eventually, this is more than just a process of making things. To make things happen, you have to be collaborative, and share value across the whole enterprise. What I’m saying is we need to move from a process of makings things, to a process of making things happen. Then we can think very differently about manufacturing.

Park: I think we have two types of manufacturing. I think what Dr. Lee is talking about at a high level, that side of the equation is pretty easy to sell. It’s easier to get high-end people, the cream of the crop, in the business. But the bulk of manufacturing is still a standard traditional manufacturing process. This one is quite difficult to sell because it is still somewhat of a smokestack environment. During this last downturn, for example, when the U.S. unemployment rate went up to 10%, the unemployment rate for manufacturing people was probably more like 15% to 25%. So the stability in those jobs is not there. When there is a downturn, obviously what we’re trying to do is figure out how flexibly we can move down, and up, on our capacity to produce, which is often dependent on the number of people. How do you attract people into an industry that’s looking for more flexibility?

Lapide: Many people still believe manufacturing has a negative image and that the brand is fractured. But is this true all over? I don’t think manufacturing has a bad name in Japan. Take countries that have not degraded the brand, countries like Japan and Germany. Let’s learn from them why the brand didn’t erode there. Let’s learn what countries might be doing better than us, but let’s not always think it’s a problem worldwide.

I’d also contend that we do have a manufacturing industry that has done a good job: the high-tech industry. It’s OK to go to work at Apple or at HP or Intel. Those are clean manufacturing environments, right? It’s OK to go there because they are smart and they can attract good people who graduate and are willing to go in there because it’s cool. Why can’t we attract people in other sectors, too? They like to look at the more attractive industries, the highly engineered industries. But the automotive industry is highly engineered, yet it still has that same poor image right now.

Tate: So how does the industry go about changing that impression? There are many issues involved here: about making manufacturing an attractive proposition for new talent, about dignifying the manufacturing profession, about communicating the importance of manufacturing in economic and social terms, and about developing new leaders for the future. What can companies do to attract and develop a new generation of manufacturing professionals?

Serpico: I think a lot of it is about career opportunity. In some industries you get pegged as a manufacturing person, but I think the better companies allow engineers in manufacturing to become true leaders. Perhaps in the high techs of the manufacturing world people have more ability to move up to a leadership role, as opposed to, say, a consumer product industry where you get siloed into sales and marketing versus manufacturing. My theory is that if you can’t beat them, infiltrate them. So my dream would be to take some of the manufacturing people who have good mind-sets, good cost-cutting skills, good technology skills, and put them in the areas of supply chain or marketing so they can flourish. The career longevity of a manufacturing person who also has experience of supply chain, marketing, or sales is an enormous plus.

Brousell: Thanks to all of you for raising many important issues about the future of manufacturing. We look forward to continuing the discussion through our new Leadership web portal, the Manufacturing Executive Journal, and our live events in the year ahead.

 


Category: ML Council
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Written by David Brousell

Global Vice President, General Manager and Editorial Director of the Manufacturing Leadership Council



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