By Jack Healy, Director of Operations, Manufacturing Advancement Center, [email protected]
There is a growing realization within the New England manufacturing community that the most essential ingredient for manufacturing’s survival — engineering skills — is in short supply. The most notable aspect of recent downsizing (2001-2003) was the loss of engineering skills. In the past, manufacturing companies often had layoffs that were not in direct proportion to losses in business volume. Such companies used to retained skilled employees in order to ensure these skills would be available when the inevitable recovery occurred. Unfortunately, this is not happening in the "Great Adjustment." Many skilled technicians and engineers are now lost to the manufacturing community. And this condition is not expected to change very soon as college engineering course attendance continues to stagnate. It’s gotten to the point where we only produce one sixth as many graduates with science and engineering degrees as Asian schools. So tell me, who is going to win that race?
The recent announced acquisition of Gillette by Proctor and Gamble is a direct indication of the value of engineering. As reported in the Boston Globe, "41% is the share of sales Gillette racked up in 2003 from products it had introduced in the previous five years. More importantly, it is a number that has stayed over 40% for the past decade, avoiding the commodity trap." To consistently launch that many new products over a sustained period of time is a direct reflection on the Gillette engineering staff. This is certainly the thinking within Gillette, as one of their senior executives stated, "They have an investment in their engineers and want to take care of them." Which is probably why Gillette has the engineering capability to accomplish great things, like reinventing high-speed packaging to the point of being able to pack razors at the rate of 1,400 pieces per minute. Placing a high value on engineering also explains why Gillette has not moved it’s manufacturing to China, as conventional wisdom seems to be prompting commodity manufacturers. Then again, good engineers often disprove conventional wisdom.
Newsline reader Jim Bleck, who heads his own design firm, recently wrote to us. " I was at the Consumer Electronics show in Las Vegas. China is now pursuing ‘design’ as the next area to improve excellence. The reason is that US companies (Microsoft, GE, etc.) do not allow the Chinese to make any profit." If the Chinese cannot make money supplying the large OEM’s, what chance do American intermediate parts suppliers have facing the same challenge?
NYPRO & Engineering One such supplier that has succeeded is NYPRO, Clinton, Mass.-based manufacturer of plastic injection parts. They pushed the development of their engineering design capabilities to the extent of buying into a product design firm, and they have now positioned themselves as an ‘Original Design Manufacturer.’ NYPRO backs up this design capability with a $10 million dollar Research & Development Center. The company has now evolved to the point where it is able to design, manufacture, and launch products around the world on behalf of their customers. And NYPRO now derives approximately half of its sales from these value added services. Such a success is a direct reflection on how to be a winner.
Figure 1. NYPRO’s growth in revenue from value add services.
In this changing world of manufacturing, it is obvious that if NYPRO chose to stay a custom injection molder they would not be anywhere near the company they are today. As a result, NYPRO went through the recent "Great Adjustment" unscathed and they continue to grow with all of their engineering resources intact. Like Gillette, NYPRO possesses unique manufacturing engineering capabilities that distinguish them from their competitors, to the point where NYPRO even sells such capabilities through their own Automatic Assemblies Division.
Toyota’s Engineering Innovation Proprietary engineering is the greatest asset that a manufacturing firm can possess. It sounds simplistic until you really understand it, then utilize what it can do in the marketplace. Professor J.T. Black, Head of Engineering at the University of Auburn, in a recent communication to the Newsline, highlighted an as example of this capability how Toyota has used proprietary manufacturing engineering capabilities in it’s own rise to world leadership in the automotive industry.
Professor Black stated, "Let me be very specific. Do you know how teeth are machined on a steel bar? The common process is a broach – or vertical broaching machine. Fast, very precise, great finish, etc. Toyota does not use this classic process. Why not? It is too large for a manufacturing cell, the change over time from one part type to another is very long (designers of broach machines never considered either footprint or changeover time in their design of the broach) and the machine is not easily moved. In addition, the classic broach is not designed for easy maintenance nor self-inspection of the parts as they are being made or immediately thereafter. In other words, the classic broach does not fit into the design philosophy of one piece flow cell designs. So what does Toyota have? They have a machine they designed called a ‘rotary broach,’ which is just one of many home designed and built machines that exist in their manufacturing cells. Would you like to see one? Sorry you are not a sole supplier or sole customer in the supply chain."
So here is the manufacturing strategy of the future:
Design and build products with unique aspects and manufacturing technology that competitors (aka the Chinese) cannot ‘rip off.’
Proprietary engineering is all about developing the ability to absorb and exploit knowledge to a competitive advantage. Fundamentally, the engineers are the people who create knowledge and manage innovation. Competition provides a stimulus to innovation and innovation usually determines the intensity of competition. Poor skills among our engineering community hinder innovation. Did you know that 20% of manufacturing engineers lack a four year degree?
In addition to education, there is another point that must also be addressed, which Jim Bleck brought up to us regarding an aggressive need to change. As Jim stated, "We see more manufacturing innovation coming from Minnesota and Wisconsin. They have many of the same problems we do but they seem to be more aggressive marketers."
For those who are interested, the Manufacturing Advancement Center is now starting an initiative to address the lack of engineering education within the incumbent work force throughout New England. Interested parties can express their interest by e-mailing me at [email protected] and providing a brief summary of your perceived engineering training needs.
In the coming age of mass customization, no firm will survive without good engineering capabilities.
