By Jack Healy, Director, Manufacturing Advancement Center, [email protected]
“I have the sense that business people today appear to be ashamed
of what they do,” stated Speaker of the House Thomas Finneran,
in his remarks at the recent Associated Industries of Massachusetts
89th Annual Meeting. No denials were heard either publicly or privately
among those gathered at the meeting, reinforcing the truth of the Speaker’s
statements.
Possible reasons for such a condition may be attributable to the past
years of corporate malfeasance and excesses. Yet we have seen U.S. corporate
profits expand by 57.5% since the last expansion ended in Q1 2001. The
significance of this achievement is brought home when you realize that
in the 11 quarters after the peak of the previous business cycle (going
back to 1948), profits only rose by an average of 14% and never more
than 21%. If recent corporate profits had risen on par with the past,
they would be $278 billion dollars lower.
This hesitancy of pride may be described in the words of Henry L. Doherty
who stated, “A great American business success was probably never
attained by chasing the dollar, but is due to the pride in one’s
work…the pride that makes business an art.”
Lack of Pride in Manufacturing Anyone who works in manufacturing knows that creating and producing
a product is also an art. Yet like Speaker Finneran , I am puzzled by
the general lack of pride shown by manufacturers who do not speak out
on the various issues being raised in the media relative to the losses
in manufacturing jobs.
Despite years of an overvalued dollar, poor trade policy enforcement,
and increasing structural costs, Massachusetts’ manufacturers are
generally silent on their achievements. Yet their successes are many.
Massachusetts’ manufacturers continue to be one of the largest
groups of exporters (ranked 11th nationally). They produce $17 billion
in products, which is approximately 50% of our gross state manufactured
product. Our state manufacturing exists on trade, and manufacturers
are doing more than their part in maintaining our balance of payments.
Massachusetts’ manufacturing provides over 300,000 high paying
jobs and supports hundreds of thousands more in the other sectors of
our economy. There would not be much outside of Boston without manufacturing.
The overall productivity rate of Massachusetts’ manufacturer’s
is 20% higher than the national average. And it has to be in order to
compensate for our high structural costs. You are either good or you
are gone.
Today’s manufacturers in Massachusetts have survived not by computerizing
and automating production in the literal sense, but by systematizing
their production for flexibility and responsiveness through “Lean
Thinking.” This is best summed up by the world’s foremost
business consultant, Peter Drucker, in a recent article in Fortune Magazine
who stated, “You see, these figures measure productivity when work
is being done, but they do not measure the loss of productivity when
work cannot be done, such as when you are setting up a plant to make
something different.”
Mr. Drucker went on to state, “ Productivity increases are actually
greater than all the figures we see because the new, more flexible manufacturing
processes practically eliminate set up time, when production has to
cease. In some cases, this setting-up time has come down from three
hours to four minutes. This does not show up in the productivity figures.
Nor do the figures address the value of being able to change the mix
of production, because they focus on the pure out put of traditional
mass-production industries.”
Mr. Drucker has rightly pointed out that the biggest transition in
U.S. Manufacturing history, to a leaner, more flexible, more productive
manufacturing capacity, is not even being recognized, let alone correctly
measured.
The media’s focus today is on outsourcing and the loss of manufacturing
jobs. There is real talk in Washington about restricting free trade;
for Massachusetts, this will have a serious impact on our manufacturing
economy. With such noise going on around us, it’s important that
we communicate what has been achieved and what is happening in our plants.
The issue of pride in manufacturing is not an exercise in ego. It’s
needed balance to recent cries for government intervention.
The Manufacturing Champions A group of senior executives from large and small manufacturers who
are leading this productivity revolution and who are proud of what their
companies have achieved have created a new, national organization, Champions
for the Association for Manufacturing Excellence. The group, a broad
alliance of companies within AME, provides state-of-the-art management
techniques and skill development opportunities, enhancing member companies’
commitment to excellence.
This is your chance to get involved, share your experience, and demonstrate
the real contributions being made by manufacturing. For additional information,
please contact:
Jack Healy
New England AME Champions Chairman
E-mail: [email protected]
