American manufacturing building on its momentum

The big message that came out of our conversations with global manufacturing this week: American manufacturing is the envy of the world.

05/22/2012


The big message that came out of our conversations with global manufacturing this week: American manufacturing is the envy of the world.

How do we know this? Perhaps the whole message about U.S. manufacturing could be summed up by this quote from my interview with Michael Ziesemer, the COO of Endress+Hauser:

“When you look more in-depth at the business, the patterns have changed,” he said. “There have been weaknesses in southern Europe, but France and Germany are growing. We see some difficulties in China, but China is not as much of the locomotive of the world’s economy. The U.S. is absolutely great. The business climate is absolutely great.

“It is amazing to see flexibility of the U.S. economy. It is the best in the world. It is unparalleled,” he said. “Sometimes they do things terribly wrong, but then they bring things around very quickly. They’re growing in oil and gas, but also pharma, and food and beverage. We see the recovery in OEMs and machine building. The Administration has pushed a sort of New Deal for industrialization. We’ve invested a lot in the U.S. and in our U.S. factories.”

We also heard a lot about the need for better data, more transparency between the enterprise and the plant floor, and better maintenance practices. Two themes on the Plant Engineering side also seemed to resonate: our continuing emphasis on maintenance as a profit center and our new emphasis on energy as a raw material. When I mention those ideas, it seems to crystallize the concepts for a lot of suppliers.

There has been an increase in the machine builder business for most suppliers. They are trying to deliver flexible technology to machine builders and OEMs that meet the end user’s needs. The days of commodity solutions for most manufacturing problems are coming to an end. The suppliers who can deliver custom solutions and can work with end users and multiple suppliers to deliver broad-based solutions will carry the day.

Perhaps the single most interesting quote of the week came from the Chinese premier, Wen Jiabao, at the opening ceremonies:

“ ‘Made in China’ products are generally at the medium and low rungs of the international industrial chain, and have a long way to go to catch up with the advanced level,” he said. “China is confronted with major challenges and problems with industrialization, including an inefficient model for industrial development, lack of market competitiveness, weak capacity for scientific and technological innovation, and low efficiency in the use of resources.”

The big message from Hannover Messe: American manufacturing is the stable engine that is driving growth worldwide. The world of manufacturing is not simply an import or export business, but an intricate, interdependent multinational matrix. What American manufacturers need to understand is how their individual products fit into this matrix, and what great opportunities are available elsewhere in the world.

And here’s the only downside: Not enough American manufacturers are taking advantage of this unique world stage. While Hannover Messe reported attendance from the U.S. was up in 2012, there should be a flood of American manufacturers learning about what’s new and what’s next, as well as finding new global partners for their manufactured products.

Someone suggested to me that it was hard to measure the ROI on such a trip. I suggest that the ROI for not attending is zero, and zero is not a growth strategy. Despite the naysayers and the pundits and the politicians who just flat out got it wrong, American manufacturing is the envy of the world right now. It is building momentum.

This is no time to take a step back.



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