Reflections on the Future of Manufacturing in Central Massachusetts
By Dr. K. (Subbu) Subramanian, Director – Core Technology (SPT), High Performance Materials Sector, Saint- Gobain Co.
Everyone is clamoring about the "decline in manufacturing and the resultant loss of jobs." The pain is real. You can see it in the empty parking lots and the decaying brick buildings…if you ignore the few that have been converted to shopping malls. You can see the pain in the careers of many, who believed in lifetime employment only to realize that the "lifetime" really meant the lifetime of the plant and equipment they were working with!
On the other hand, there is more steel and other raw materials being produced and converted to buildings, bridges, automobiles, appliances, and other industrial and consumer goods worldwide. So, how can we can say manufacturing is dying?
The truth, like the devil, is in the details.
Worldwide, we are producing more of the same things we have known how to produce for a long time. There are exceptions of course, like nano materials, bio polymers, computers, consumer electronics, etc. Other than a handful of new developments, most of the time we are doing a good job of reproducing the things we already know, except that we are now using worldwide resources. Since there are plenty of people around the globe who can do the same thing over and over again at much lower cost than those in developed nations, manufacturing is indeed soaring to new volumes and capacities.
The problem is that companies cannot continue to do the same thing that anyone else can do and expect to get paid more! The reality is that we will see a constant decline in manufacturing wages or fewer jobs available locally unless we have a culture of innovation – a passion to constantly ask "Why?", find the answers, and respond with "Why not?"
But, wait a minute. No one said that we have to do the same old job, the same old way. So what can we do? Conceive of new "things" – new products – and conceive of new ways to make the things – new processes. Then repeat the processes – new or old – more and more efficiently, cutting the cost, time, and inefficiency between steps. We all know this process as Lean Manufacturing. And we can be even more efficient if we use all the resources that are available around the world – through digital technology and networked applications.
Every time we make such improvements, we make new waves in the modern manufacturing world. Many who are successful, individually and in small groups, are succeeding because of these pathways.
But, there is a small catch and a large benefit: Unlike professional services and small entrepreneurial organizations, manufacturing requires large investments in physical infrastructure, plant and facilities, and other supporting resources. In return, manufacturing creates economic opportunities for a larger cross-section of the population, whether in a region, a state, or a country.
As the saying goes, "What is good for GM is good for the country," is being played out in the press on a daily basis. This is because the manufacturing base underlying large companies like GM has an economic multipier that has a significant impact on the national economy. The same cannot be said of today’s giants of information technology, such as Microsoft or Google. The same cannot be said of distribution companies, like Walmart, even though the asset value they provide their investors may be much larger. A robust manufacturing base requires infrastructure that is more than large buildings, warehouses, and parking lots. Manufacturers require a network of suppliers; specialty manufacturers of tools, jigs, and fixtures; controllers; automation devices, etc. The manufacturing infrastructure is not, and will probably never be, supported by small and isolated companies or institutions. In the Global economy, a competitive infrastructure will require a fundamental re-thinking of available local resources, finding new ways to integrate them into a larger manufacturing resource, and developing means to aggregate them for the common good.
Today, through the organized, central planning of the Chinese Government, much of the manufacturing infrastructure’s resources are readily accessible, especially for those from developed nations such as the US, W. Europe, and Japan. However, as the cost of energy, transportation, and other resources increases, the low cost of Chinese labor may not be a sufficient competitive edge. As the cost of information processing and physical logistics – a large fraction of which are the result of human efforts today – continues to decline, manufacturing new "things" using "new processes", rich with digital technology applications, will soar to new heights around the world.
The drivers of such developments will be the education, knowledge, and skill levels of the local work force. Central Massachusetts has plenty of these resources. Many are vibrant and successful in their individual efforts and, to a smaller extent, through collective pooling of resources and capabilities. But, robust growth in manufacturing also requires large and integrated investments. Such investments may not be possible through individual efforts and initiatives. They will require a common vision for collective progress. Such vision must lead to substantial investments in infrastructure for manufacturing related resources. This will require a mind set that challenges the conventional wisdom, "Take care of your job well and the rest will take care of itself." Instead, we need a collective resolve for system thinking because the whole is larger than sum of its parts.
It is not individual resources or skill levels that will determine the future of manufacturing in Central Massachusetts. Instead, it will be the community’s "Innovation Culture" and visionary leadership that develops integrated solutions and bridges the valuable resources in the community that will set the pace and direction for the future of manufacturing.
Regional programs organized to develop sustainable innovation have provided ample evidence that the ability of small entrepreneurial manufacturing firms to produce path-breaking processes has also been linked to their participation in networks of interacting firms.
Anyone interested in ensuring the future health of their companies by joining an innovation-based network, can do so by contacting [email protected]
