Scot Webster, Senior Vice President, CAS engineering and laboratory operations at Underwriters Laboratories, discusses the company’s latest global manufacturing and marketing report, The Product Mindset, with Plant Engineering.

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Q: The 2012 UL study seems to indicate that last year was kind of a lost year for manufacturers – that concerns about the global economy were matched by concerns over product quality and safety. What’s your sense of the manufacturing pulse right now?

Our study shows that optimism has given way to realism impacted by numerous external forces including economic instability, political turmoil and natural disasters. Our sense of the manufacturing pulse right now is that these forces are still in play and thus their impact is still relevant today. Moreover, attributes such as environmental sustainability, responsible sourcing practices, country of origin, safety, and performance are having a greater influence on buying decisions.

Q: Quality does seem to be the key. From UL’s perspective, what are the barriers to product quality, and how can these be overcome?

It’s clear from our study that product quality is an imperative for both consumers and manufacturers, regardless of region or industry. Quality appears to be the factor manufacturers most believe will drive future success, and it’s what consumers most look for when making purchasing decisions. From UL’s perspective, we holistically view quality in terms of safety, environmental responsibility, performance, dependability and lack of defects.

The challenges to produce consistent, quality products are too numerous to name here, but they include key fundamentals such as effective, reliable sourcing partnerships, efficient, dependable manufacturing processes, and quality testing and inspection services. From our perspective, high quality and safety are most easily achieved when they are built into the product design versus testing for them in the end product. UL often partners with customers on powerful improvement tools such as early design engagements, six sigma and lean processes.

Q: The environmental pressures worldwide seem to be at least getting some attention in developing economies. What will it take for that to get more attention? Is the environment truly an economic issue for manufacturers as yet, or do we have some distance to go?

From our study, all indications are that the environment is becoming more important to manufacturers (with 80-90% of them stating sustainability is critical to their ability to compete effectively). Furthermore, manufacturers in emerging countries cite higher consumer demand for eco-friendly products than do manufacturers in developed countries. So, it appears that environmental concerns are growing across the globe. 

Q: The debate over “Made in the USA” vs. global sourcing continues, but it’s less of an issue worldwide. What is your view of global sourcing and its importance, both to manufacturers and to consumers?

The study clearly shows that what is in the product and where it is made are both equally important to consumers (not only where the products are manufactured but where its sourced ingredients or components come from). Likewise, manufacturers’ perspectives on the importance of country of origin on product quality has grown in importance.

Recently there have been some high profile published cases of companies bringing production back to the U.S. from overseas, however our study revealed that more than 76% of manufacturers believe global sourcing is a means to improve product quality, and 46% will increase their global sourcing over the next five years. The desire to find suppliers in new countries is often evidence of a manufacturer’s need to maintain compliance, reduce costs and increase quality. It appears that global sourcing will be a preferred supply chain choice for many manufacturers in the foreseeable future.

Q: What do you see as the keys to success in a global, competitive manufacturing environment?

There are many keys to success for manufacturers today. This study offers some insights to discover new keys and perhaps sharpen existing ones. One example is related to the quality and safety perception gap between manufacturers and consumers. Specifically, consumers are demanding safe, reliable, and quality products, but there is a consumer mindset that manufacturers value profits over these attributes. On the other hand, it’s clear that manufacturers value and invest in processes, sourcing, and testing to impact quality, safety and reliability. This perception gap might be lessened if manufactures were to provide greater transparency and educate consumers about how much they invest and what they do to incorporate quality and safety into their products.

The bottom line: Consumers continue to demand more and hold manufacturers accountable when there is a problem with a product. So the pressures are on for manufacturers to be trustworthy, to demonstrate a continued focus on quality and safety, to be more transparent, and to effectively manage complex supply chain challenges. I see the winners as being those who will continue to deliver customer value, on time, and at the right profitable price.