'The world is a more competitive place'
June 3, 2008

1. Manufacturing for the Future: This is not just a nice slogan. It was the title of the June 3 discussion in downtown Chicago, sponsored by Financial Times and Machines Italia, a part of the Italian Trade Commission. That a storied British business publication and an Italian commerce group would come to the Midwest to discuss global manufacturing ought to tell you something about where we are in the world right now. And where we are, according to the experts, is right where I thought we were -- smack in the middle of an exciting, evolving, maddening and challenging environment.

2. Some general thoughts: From Financial Times manufacturing editor Peter Marsh: "The world is a much more competitive place. People in high-cost countries have a lot to learn from those people based in low-cost countries. The people who will do well are those who will straddle these two parts of the world."

3. A switch back homeward? Dr. Pascal Bova of the Italian Trade Commission noted that some manufacturers had lept at the idea of low-cost manufacturing salaries and have discovered that also leads to lower quality and logistical issues that drive costs right back up. "Now they are thinking that shipping their entire manufacturing operation abroad maybe was not such a terrific idea." But he added this observation: "The U.S. used to be a magnet for highly-skilled workers. Now changes in U.S. immigration laws and more aggressive recruiting has led to more than 200,000 workers trained in the U.S. returning to their countries of origin."

4. The new realities of manufacturing: Dr. Ambrogio Delachi is president of the DELMAC group, which makes machines for furniture manufacturing, and is also president of the Italian trade organization representing wood processors. He noted labor was not your biggest expense "if you have a good factory and a good product." What you do need is a flexible manufacturing environment. "Today people require flexibility, low batches, quick changes. We're trying to work just in time. Fifteen years ago, we asked one of our biggest customers what their minimum batch size was, and they said 10,000 pieces. We're looking at batches of 200 pieces today."

5. And what are the trends? Sean Monahan, a VP at consultant A.T. Kearney, noted five mjor trends in manufacturing: 
* Globalization
* Demographic changes
* Consumption patterns
* The use of natural resources
* Regulatory and activism issues. 
"You can begin to tailor your manufacturing operation only after you've fully identified how you intend to compete. Develop a framework that works for you."

I can't say it enough: We're in a competitive global manufacturing environment. So compete already!

Posted by Wolseley on June 3, 2008 | Comments (0)