It's time to turn optimism into action
As real as the recession was, the end of the recession should be just as real. Taking all the lessons we learned, we have to move away from the shallow end of the pool and ramp up for growth.
People naturally assume one of the best parts of this job is the travel. When I tell my friends I’m off to Germany for a week, they assume I get to see a lot of the area. In reality, the sights are pretty much the same, no matter where I travel. I see a lot of convention halls, hotels, airports, and taxis, and those all start to look pretty much the same after a while.
Over the last nine months, there’s been one more common thread running through all those convention halls and airports, taxis, and hotels. There’s been one thing I’ve seen and heard at every stop around the world: Optimism.
It started at a few trade shows at the end of 2010. Show floors were filled with customers who had purchase orders in their hands and a couple of years of pent-up projects that had to be dusted off. Plant Engineering’s annual Salary Survey showed a 50% increase in the plant managers who said the recession was over.
The chorus of positive chatter reached its peak last month at the 2011 Hannover Messe in Germany. While more than 250,000 people wandered the fairgrounds in Hannover, the buzz was unmistakable. It was an odd sound – no one had heard it for a while, but everyone remembered what optimism sounded like.
Growth in manufacturing has led the U.S. and the world out of the throes of a two-year recession. Manufacturing suppliers and analysts were painting a rosy picture of the near-term growth for the sector. Moreover, it was unconditional optimism.
In April, oil prices continued their steady march forward, but even that factor wasn’t enough to dim the mid-term outlook. Analysts were pointing to graphs that looked suspiciously like a V – pointing to the bottom in 2008 and sharply higher in 2011. And beyond.
Dr. Siegfried Russwurm, CEO of Siemens Industry worldwide, talked about the growth in the coming five years, predicting 5% growth per year in manufacturing, and 8% per year in software, where Siemens announced a renewed emphasis.
Beckhoff Managing Director Hans Beckhoff was equally optimistic. “We have registered pleasingly high growth across all geographical areas and branches of industry. Our existing customers have regained their previous strength and have been joined by new customers and new fields of business.”
Plant managers I’ve spoken with in the last month are seeing the changes. Shifts are running to capacity. Production orders are accelerating. One facility is running flat out on three shifts to try and keep pace with growth in the automobile market.
All this optimism is tempered with caution. Of course. The depth and breadth of this recession was historic, something out children would be talking about and (we can hope) remember to avoid the mistakes that led us into its depths. Even though it was destructive and debilitation, the recession should also have been instructive and rejuvenating.
But as real as the recession was, the end of the recession should be just as real. Taking all the lessons we learned, we have to move away from the shallow end of the pool and ramp up for growth.
We have to put maintenance in a prominent position as we restore growth in manufacturing. Reaching full capacity is only possible if we have full availability. If your line shuts down because you can’t keep it maintained, you cannot grow capacity. Maintenance is a profit center, but only if you treat it like one.
Energy is the wild card in all of this. Energy is a managed process, not a utility bill. Look for the quick ways to get quick savings, but don’t forget the long-term fixes for electrical, water and compressed air system that will deliver long-term ROI. This may take a few trips to the CFO’s office, but they will be worth his time, and yours.
Don’t overlook training and worker development. This is a great time to begin recruiting young workers and to give the existing staff the training they need to meet the new challenges around you.
There are so many external factors that impact manufacturing – government, taxes, unrest in the world, and unrest in nature – which you simply cannot directly control. The issues you can control? Those are universal. Every plant manager from Bangalore to Beijing to Boston to Berlin is facing energy, maintenance, and personnel issues. If you can act on these issues, you can turn the optimism into success.
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Annual Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.