Thursday, April 12, 2012

How to Grow Manufacturing in the USA

American factories, foreign lands: How can we keep our companies here?

Lower cost of labor is only part of a more complicated story. Apple, and other manufacturers, need flexible and responsive partners that can, and are willing to, react quickly to changing demands. This more nimble and cooperative supply chain is a valuable asset–a competitive advantage for manufacturers.
What can we do to keep even more companies from taking their manufacturing facilities abroad?

Lots of things can be done to improve the results of manufacturing in the USA.  First though we should realize the manufacturing results for the USA are really pretty good.

China's results are exceptional but the USA has done well.  Manufacturing jobs have decreased everywhere dramatically - the USA job losses (while current data is hard to get) are possibly than global manufacturing job losses.

The biggest thing that could be done to improve the manufacturing situation in the USA is significant fixes to the health care system.  The cost of support the broken USA system is enormous.  The second is to have managers of our organizations understand current management concepts like lean manufacturing and Deming's ideas.

They would then understand the weaknesses in spreadsheet thinking that lead to seeing outsourcing to cheap countries as the solution to all problems.  They would see the benefits of producing close to consumers (which also means in the case of some that manufacturing everything in the USA moving some production offshore - for offshore customers - may well make sense).

Putting the focus on improving the processes the company uses instead of just looking for a cheaper way to do what they do increases the desirability of the USA.  Currently (this will change) the USA has people better prepared to take on a leadership role in improvements.  By valuing the brainpower of your employees the desirability of locating in the USA is increased.  This is merely due to current practices around the globe, this advantage for the USA will change (Japan and Germany are very strong in this area as is much of Europe).

Related: Manufacturing Employment Data: USA, Japan, Germany, UK... 1990-2009

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