It’s not so much in the collecting of the dots as it is in the connecting a link to your business that matters. Just last week one of my favorites, the best selling business author, Seth Godin wrote “Connecting dots, solving the problem that hasn’t been solved before, seeing the pattern before it is made obvious, is more essential than ever before. Why then, do we spend so much time collecting dots? More facts, more tests, more need for data, even when we have no clue (and no practice) in doing anything with it.”
In fact it is difficult to come up with news for industry that isn’t related to digital technology and/or the mere collection and measuring of data points—and it’s supposed value. I include a couple of factoids in that regard in this very post.
Consider these 25 timely news bits, appetizers for real discussion. Consider how each one just might be at the end of a tail wagging you about.
Godin said, the ability to connect the dots is “what’s rare, and valuable”. In fact, a bag of dots isn’t worth as much as an ounce of your insight.
I hope you find my sample interesting, and motivating. Be industrious.
44 percent
Capacity utilization at Fiat’s European factories vs. more than 100 percent at Chrysler plants in the U.S.
IHS Automotive10 billion
Projected number of smartphone devices on the planet by 2017—an equivalent of 1.4 units per capita worldwide (7.6 billion people)
Cisco study$1.2 billion
Amount Toyota agreed to pay to settle the largest criminal penalty ever levied on an automaker in the U.S (for concealing safety defects)
NYtimes.com70,000
Number of temporary workers Amazon hired during the last holiday season—up 40% from the previous year
NPR.org375
Number of planned new vehicle introductions U.S. automakers will roll out between 2013 and fourth-quarter 2015
POLK Research$200 million
Amount Apple paid for analytics firm Topsy, allowing the world’s most valuable company to gain access to every single Tweet in real time
Evan Applegate/Bloomberg0.64%
Total U.S. farmland devoted to certified organic food crops—notwithstanding the tripling of retail sales of organics since 2003
Nutrician Business Journal$726 million
Amount Corning glass spent in the last fiscal year on R&D (9.1 percent of revenue) to maintain its lead in the manufacture of smartphone display screens
Businessweek.com6000
Number cyberwarrior positions, including digital spies, hackers and investigators, the U.S. defense department is attempting to fill by 2016
Businessweek19 percent
Harley-Davidson’s first quarter jump in profits—gained in large part from new model sales abroad
Bloomberg+84%
Projected increase in Twitter’s ad revenue over 2013, estimated at $1.1 billion
CBSnews.com290,000
Shortage of professional inspectors, engineers and teachers estimated by 2020
American Welding Society2,717 feet
The height of the Burj Khalifa building in Dubai is 1,266 feet taller than the Willis (Sears) Tower in Chicago and more than double the height of the Empire State building
WIKI$12.9 billion
Projected revenue from “big data” in 2014—up from $3.2 billion in 2010
Fast Company189 percent
Gain in manufacturing output per hour, attributed to investments in laborsaving machinery over the last 30 years
Bloomberg$1.1 billion
Amount Monsanto spent to acquire data-analytics businesses that help farmers micro-manage their fields
Modernfarmer.com21,000
Pieces of metal space wreckage and debris the size of a grapefruit or larger orbiting the earth at 17,000 mph
Bloomberg$29,400
Average student debt load for the class of 2012
Institute for College Access & Success’ Project on Student Debt271,000
Tonnage of nickel mined in Indonesia in 2013 along with 18 percent of the world’s bauxite, used to make aluminum
Bloomberg$20 billion
Market capitalization for Tesla Motors—already worth more than Fiat and three Japanese automakers, Mitsubishi, Suzuki and Isuzu (the latter have withdrawn from the U.S. market altogether)
Reuters.com900 gigawatts
Amount of wind capacity floating turbines will tap from their proposed location off the U.S. Pacific coast
Businessweek.com$365 million
Amount of customers’ dollars “misplaced” by Mt. Gox the Tokyo-based Bitcoin exchange that went offline February 25
Theguardian.com+7%
Projected increase in spending on equipment by manufacturing companies in 2014 (to $211 billion) double that of the prior year
IHS Global Insight$750 million
Dollar investment BMW made at its factory in Spartanburg, S.C., making it the largest car factory in the United States by number of employees
Huffingtonpost.com4 years
Waiting time for delivery of a $64.5 million G650 Gulfstream by General Dynamics
IHS Global Insight
HIT Solutions believes the more your business keeps up with important trends, the more you will improve your product, and improve your bottom line.
Leave me your comments below; share your thoughts.
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Why do we find it so hard to walk the talk when it comes to the importance of human capital? No one argues the importance of people to our businesses. CEOs famously assert in their public relations efforts “people are our most important asset.” And in survey after survey we hear various leaders, for small and larger operations alike, recount the importance of good people and the relationship of human capital to the market value of their companies. But somehow, in actual practice, these ideals get lost. Most companies fill a new positon or, deal with a sudden loss in personnel like a nosebleed. Just get it plugged!
The days of getting by on lip service and handling human resource needs on an as-needed basis are slipping away, not to return anytime soon. It’s a growing challenge. It’s trending. And, it should be a wake up call for any supply chain with a value propostion that is dependent upon people.
The cool pool
It shouldn’t be news. Successfully attracting, and, more and more, retaining employees is a trend that will not favor the slackers and lip servers in the manufacturing sectors. Data show only 25 percent of manufacturing workforces are 30 years or younger. The talent pool of the future will continue to mismatch the ambitions of manufacturing and its relentless quest for productivity growth like cold water thrown onto a babe in the sun. The sought-after employee comprises an illusive blend of education, motivation, advanced skills and increasing understanding for service orientation. They seek more adventure and expect less security (more on that statement in a minute). Generational differences alone will have real implications for how employers and employees find common ground.
More of less
It’s a paradox. On one hand, we’re shedding workers as manufacturing automation and other effeciencies reduce overall demand for labor. On the other hand, the supply chain is forced to become competitive attracting more of fewer available (and interested) candidates. Meanwhile, automation increases complexity which exacerbates the talent gap even more.
In order to attract skilled labor and management we’ll tap a more global workforce. Therefore, smaller local and regional shops will be challenged to adapt. Integrating more miniority, more varying demographic profiles, generational differences and differing cultural and workplace expectations. Not easy to accomplish and it will challenge any existing culture.
“It is crucial to develop an innovative workforce plan; create a talent pipeline and engage employees both current and future.”2
KISS it
Of course, the talent shortage is also escalating wages. Seems overwhelming doesn’t it?
Remember, keep it simple and plan ahead. Ensure that each indivdual you hire embodies the culture you want to build or maintain. Forget loyalty and get used to a new kind of ethic around work. Select only those who can be responsible, engaged and committed to excellence. Most everything else will take care of itself.
Grouped together, all these challenges may require the expertise of an HR staff where there were none and/or more formalized talent management systems and acumen where seat-of-the-pants recruiting and hiring existed before.
Generational complexity
Three generations now coexist in the workforce. They each come loaded with their own box of rocks. The more you recognize their rather distinct physcographic profiles, the better off you will be.
Most career baby boomers (b. 1946 to 1964) were hired using two simple axis of measure: honesty and a strong workethic. Get those two intersecting and you had a great employee for life or, as long as you needed them. In return, boomers valued loyalty as the most important quality in the relationship. Whatever the case, they served a distinct purpose and embodied the qualities that helped build America for over a half-century. Look for them to live longer and retire later that any previous generation.
Generation X (b. 1965 to 1980) is in short supply, and by this time, ready for leadership positions. They won’t like shadowing Boomers and they feel quite finished with paying their dues. As a group they hold high education levels, are the most heterogeneous and, least likely to idolize you or any other leader. Autonomy and self-reliance, are the hallmarks of the Gen X.
The millennial generation, also known as Gen Y (b. 1981-2001), is the largest segment to roam the earth. By 2020, millennials will be 50 percent of the U.S. workforce. Yet, they are at the heart of the skills-deficiency crisis, especially in the maintenance industry where so much of the critical skill sets are locked in the heads of Boomers. They know nothing of job security, are strangers to loyalty and yet expect to be part of the action. Impatient to just observe, they want to participate, and they will want their views to be heard and to carry weight.
Last word
It doesn’t matter whether you’re hiring highly specialized “talent” or merely the tenacious, the job is ultimately the same: understand your priorities and the critical capabilities required for competitive advantage. And as always, you’re not done until the customer [remains] happy.
HIT Solutions believes the more your business keeps up with important trends, the more you will improve your product, and improve your bottom line.
Leave me your comments below; share your thoughts.
References:
1. 2013 Survey Sponsored by ThomasNet
2. “Managing the Talent Crisis in Global Manufacturing—Strategies to Attract and Engage Generation Y”
3. A Deloitte Research Global Manufacturing Study
4. Forbes—“The New Millennial Values” by T. Scott Gross
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Tags: competitive advantage, complexity, engagement, generational, human capital, supply chain, value proposition, workforce
Quality Assurance? Call me crazy
With some companies, recording customer phone calls is common practice. Under the guise of “quality improvement,” or Quality Assurance, you can expect a utility or an insurance company to offer you the fair and familiar warning. “This call might be monitored or recorded for quality assurance purposes ….” Something like that. I’m never really sure. All they said was it “might” be recorded. I must say, these calls often incite my competitive nature. I want to know, who gets recorded and who doesn’t? What is the criteria? Who decides? And when DO they decide? I figure, okay, if you’re recording me, let’s make this interesting, game on! I forgot what I was calling about.
With so much emphasis on customer-centric branding, you’d think the entire world was love and good deed. But given most people’s feeling and reaction to this kind of treatment, do you think these companies will improve their positioning? I don’t.
If I feel caught on one of these calls I’ll sometimes check my smartphone screen. I want to know how much time I’m investing. I’ll weigh the cost/benefit and promptly end it if I’m not content or if I cannot also use the time to multi-task. In fairness, large institutional companies are forced to monitor their call centers if there’s any hope of controlling the brand message end-to-end. They know it’s a revolving door around the call center— they’re always on the train.
Whatever the intent—research or training—I’ve noticed two things about this type of quality assurance effort 1) they’re used mostly by companies that actually need improvement and 2) these companies rarely seem to improve. They should know; satisfaction is not the expectation most of us hold. There are exceptions however, read on.
Exceptional service
Some time ago, for Accessa Coatings Solutions, I (happily) wrote a review of “Delivering Happiness,” the book penned by Zappos chief Tony Hsieh. Zappos’ brand promise of exceptional customer service is the new gold-standard. Zappos will occasionally record calls as well, but it’s a totally different human experience. Smart people, no script, very engaging and you’re always, satisfied. If you read the book, you may recall they uprooted and moved the business from San Francisco to Las Vegas so they could tap a larger pool of service oriented people. They sell shoes online but call them and ask about the weather in Vegas or where to find the best pizza. They never let you down. (Can’t believe I’m still talking about this book!)
Other exceptions are small companies who also strive to place their customer in the center. HIT Solutions comes to mind and I’m not intentionally plugging, I just know it to be true. These are exceptional companies who are hands-on and know, intuitively, the importance of exceptional service. They won’t be recording your call but you’ll get the biggest ear you could ask for.
Last word
No one buys any assertion of “quality.” To borrow a well-known Springsteen chant, “we must prove it all night.”
There is no such thing as a customer service person or department at Zappos. Instead, the whole organization is driven by a mission to provide the best customer service possible. Period.
You should try it. Start by listening and under-promising. Then make sure you find a way to deliver just a little more than anyone expected. Everyone is in charge of service. Call me crazy but that’s the only quality assurance anybody I know wants.
HIT Solutions believes the more your business keeps up with important trends, the more you will improve your product, and improve your bottom line.
Leave me your comments; share your thoughts.
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Tags: customer need, customer satisfaction, customer service
A game to win
Recently, billionaire and technology magnate, Bill Gates, subjected himself to an open game of chess with the newly crowned world champion (23-year-old Norwegian, Magnus Carlson). Save publicity, I’m not sure what the motive was because Bill was greased in exactly 1 minute, 20 seconds—after just nine moves of chess. Always the pragmatic, Gates told the audience during the first couple of moves, that he was under “no illusions” … this game has “a predetermined outcome.” Moments later, in an obviously lame last move, he uttered “Oh, shoot.”
Gates played the game well nonetheless. He quelled all anxieties in the room using a predictive method. He knew his outcomes when he started; he did not try to alter, stop or slow the game to prevent what he knew was imminent and, he enjoyed the process—otherwise he would’ve never agreed to be humiliated so. He’s a smart guy. By accepting the challenge, he also knew he would not (could not) exceed a point of diminishing returns on his investment. He had all the information he needed. He was in control.
Choose your game with as much thought. Maximizing shop performance can be just as satisfying, predictable and rewarding as Bill’s lousy chess game. You just can’t have any illusions about maintenance to actually win.
Protocol’s fine; autopilot, NOT
In the last IB post “26 News bits, on trend”, I offered an array of insight for its predictive value. Each factoid could be a signal of a trending change. The overarching message: keep informed, keep your mind and the business out of automatic mode … and out of trouble.
Apparently, long hours of flying in “autopilot” dulls the skills of airline pilots and flight crew. Great news eh? This was the observation made by a U.S. advisory committee, working under the Federal Aviation Administration. (Source: CNN)
Controlling every detail in your shop is key to your ability to be competitive, profitable and sustainable. Protocols are dandy—I’ll always support process— but they should also include periodic review and scrutiny.
Without regular audits acuity is dulled. The process itself will mask reality and change the questions when you rely on autopilot. When something’s out of sight and out of mind, like proper machine/tool lubrication for example, it will show up later as the weak link that brought production to an unplanned halt.
Make it your vision to maintain utility systems equipment and production machinery as close to new condition as possible. Always be ready to start up and run. Make shutdowns rare and plan them carefully.
Factor this into your spec
Faced with ever increasing new challenges, we’ll always need new ways to meet tighter customer specifications and the shortened lead times buyers demand.
Of course, what’s mostly predictable is the growing list of governmental, social and environmental enforcers. The regulations that limit industrial waste and the emissions that are created in some lubricants such as volatile organic compounds (VOCs) require state-of-the-art formulas, dispensers and expert advice for each specific application. And beware. Statistical process control principles as well as computerized maintenance management systems (CMMS) are hard to beat, but you still have to have the right specifications and the most relevant and current data in place before you can reap the benefit.
New machine? The bearings that will carry the brunt of the load are often manufactured for that machine with generic lubricants—I’m sure you can appreciate the machine manufacturer’s dilemma. With your specific conditions, certain lubricants can break down before the bearings themselves. Besides the above-mentioned industrial waste and emissions issues we have to also consider the heat, humidity, corrosion and, the ingress of contaminants to name a few. Predictive maintenance would advise changing (at least checking) all lubrication specifications as soon as possible in order to keep the shop running to every expectation. Better yet, include exacting lubrication requirements when you order. Otherwise, your best bet is to relubricate the new bearings. At minimum, check with the machine manufacturer before needlessly scrapping and replacing bearings altogether.
Last word
Lubrication is critical to the performance and life of anything that moves. Like trends, machine wear starts at the microscopic level and before you know it you have a tsunami.
Seizures are ugly and downtime is even more expensive when it’s unplanned. Facing that situation, machine repair, and the replacement parts order that ensues, come at the grace of an already challenged supply chain.
Predictive maintenance is a design that gives you the control to allow convenient scheduling of corrective maintenance. Played right, it will also help you prevent the calamity of unexpected equipment failures yielding substantial cost savings and even more reliability.
If you depend upon machines, consider proper lubrication the most critical system you rely on to stay in the game. The key to predictability is ultimately having the right information at the right time. It’s now your move.
HIT Solutions believes the more your business keeps up with important trends, the more you will improve your product, and improve your bottom line.
Leave me your comments below; share your thoughts.
Filed under: Management, Operations, Strategy, Technical | Leave a Comment
Tags: corrective-maintenance, lubricants, machines, predictive-maintenance, shop, VOCs
26 News bits, on trend
Connect the dots. Adapt and prosper
The pace of change will never be as slow as it is today. Business has become a race to connect the dots and make sense of a frenetic and fast moving world. Some of us will get lost in the mire. What do you do?
Change happens so quickly we’re lucky if we even notice. Trends are obscure, noise is high and relevance is lost. In spite of these challenges, looking outside your own industry is particularly beneficial when you want to understand what’s going on inside.
According to a new study of small to midsize business owners (1700 with an average revenue of $4.7m), growth begins with control, not revenue. “Getting control of the business … is what leads to real growth.”
It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” —Charles Darwin
I hope you find my sample interesting, and motivating. Be industrious.
’08
Last time U.S. factories operated at the current 32 month high (79 percent of capacity)
www.bloomberg.com21+
Dow Jones Industrial Average 2013—percentage gain for the fifth consecutive session
http://www.nytimes.com85%
Consumers who say they are willing to pay above standard price for a product or service to ensure they receive a superior experience
North American Customer Experience Report published by RightNow Technologies1991
Last time single-family housing starts climbed 20.8 percent in a single month. The 727,000 starts in November 2013 was also the most starts since March 2008
Bloomberg—Lorraine Woellert15
Number of companies Apple acquired in the fiscal year ending Sept. 2013. “None [of them gives the company] new users or revenue.”
Bloomberg51
Age of GM’s new CEO, Mary Barra, who on January 15, 2014 becomes the auto industry’s first female chief
Forbes#1
“The Business of Belief,” the best business book of 2013 according to Inc.
www.inc.com18%
Marketers who actively collect data insight to create a holistic view of their customer
Teradata—Lisa Arthur56
Age at which fictional James Bond would have killed himself boozing
British Medical Journal52%
Scorpio Tankers (STNG) expected 2014 sales growth. The tiny shipper (14 tankers) also expects a 298 percent earnings growth.
Bloomberg
$16T+/-
Projected: China’s household wealth. Now growing at its fastest pace in 5 years
Bloomberg/Bank of Japan80%
Number of business owners who say inconsistent cashflow is a problem
2013 Pulse of Small & Midsize Business Study5 years
When computers (PCs) are predicted to see, touch, feel, smell and hear
Dr. Bernie Meyerson, head of IBM Innovation$3,100,000,000
Estimated size of the worldwide additive manufacturing market (3D printing) by 2016 ($5.2 billion by 2020)
http://www.forbes.com$250,000
Price of one seat on Virgin Galactic. The wait is 650 long for the 2014 space flight
http://www.virgingalactic.com85,000
Number of GE-Boeing fuel nozzles that will manufactured in 2015 using 3D printing
Bloomberg report143 vs. 70
Cost of a megawatt hour (in dollars) worldwide—solar vs. natural gas
http://theenergycollective.com44%
Portion of those surveyed who say their supply chain will be [modified] to be primarily customer-centric in the next two years
http://www.supplychain247.comSix in ten
Consumers who say they are more likely to tell others about their experiences today than they were five years ago
Dimensional Research Study
330lbs
Approximate weight of BMW’s I3 passenger frame—made entirely at the company’s $100 million carbon-fiber plant
www.businessweek.com579,814
Number of students enrolled in engineering programs in Mexico in 2011—double the number 5 years earlier
4.4%
Manufacturer purchasing managers sales projection for 2014. (2013 projection: 4.8 percent; actual 3.4)
Bloomberg—Michelle Jamrisko$12.7B
Size of global automakers investment in Mexico, since 2010 (Nissan, Honda, Mazda and Volkswagen’s Audi)
Center for Automotive Research in Ann Arbor, Mich38%
Number of junior Wall Street employees who told pollsters they would engage in insider trading (to make $10m) if they were certain they wouldn’t get caught
Bloomberg—Kyle Stock2014
GM’s Cadillac CTS—Motor Trend “Car of the year” (2013 sales quintupled 2012 sales)
Motor Trend60/60/63
In a survey of the “Inc. 5000,” about the sacrifices owners make to support their businesses. Sixty percent tapped savings and postponed vacations; sixty-three percent cut back their salary
www.inc.comHIT Solutions believes the more your business keeps up with important trends, the more you will improve your product, and improve your bottom line.
Leave me your comments below; share your thoughts.
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Ideas for a mind-set of success
You used to be able to hold job security hostage with depth of experience and knowledge about your area of expertise. But of course these things are changing like everything else. Pin this one on the sheer speed of knowledge transfer (information age). It is rendering territorial (domain) knowledge far less valuable than it once was. Consider recent history. GM’s Rick Wagoner bankrupted the institution leaning back and holding a limited view of the world far too close to the vest. Years before the industry’s meltdown, Bill Ford saw the writing on the wall. He reached far outside to bring in Alan Mulally from an aircraft manufacturer (Boeing). What Mulally found at Ford were people looking for someone to tell them what to do. Instead, he hired someone to teach everybody else to form a new mind-set and learn to live without a map.
This past year, in almost every post from the Industrious Bastard (IB), you could have slipped in the trail of oil that leads back to improving mind-set. If you’re a confident leader who willingly leans in to new ideas, you won’t mind that the finger points to you.
Here’s a brief insight from several posts that published this year:
“Poke the Box”
You rely on machines for much of the value you produce. But your value as a manager is reliant on your ability to communicate, negotiate and coordinate events with cohorts and select industry partners in a variety of sectors. Machines don’t have the guts to ship. And they don’t possess the will to start either. You do. Poke the box says you have to lean in to be your most industrious. It’s a dare to be curious again, unafraid of failing, okay with not feeling safe and willing to make a ruckus. This IB post was based on the book by the same title. It asks something preposterous, “When was the last time you did something for the first time?” [Link back to read the full post]
“10 Ideas on how to improve productivity”
You can make mistakes while building or making anything. But the biggest mistake is to repeat the previous error. Productivity and quality of life are inextricably tied to the series of relatively simple and incremental choices you make each day. Choices that can mean failure, not just a little productivity loss. See yourself moving swiftly from A to Z while minimizing pain and wasted motion. Create time for more life. Tip#10: Keep swinging. The batter knows if he misses, he’ll get ‘em next time. [Link back to read the full post]
“Navigate your business to growth with ‘GPS’”
You heard it many times; a business owner complains about the government, the economy, a lousy partner or greedy bankers for the failure or stagnation of their business. The reality is that for most businesses, statistics tell a very different story. A story that’s important to understand so that you and your team know precisely how to navigate around the landmines that can blow up the business. With so many balls in the air at one time it’s tough to know what’s most important. Fact is; many managers report they really don’t know what to watch. Hiring a business coach or joining a round table of peers could help you see your way to the coordinates that do matter, hence the GPS metaphor. [Link back to read the full post]
“Trending: Supply chains shift from efficiency to responsiveness”
You must pay attention to trends. Right now there’s a signal to lean from being simply efficient to becoming wholly responsive to customers. But identifying a relevant trend is not the end, it’s “how you respond … and then how you adapt your business” that really defines your outcome. And most of that definition is derived from perceptions you create, so you have more control than you might think. Particularly when you consider the larger pool of customers who could be entering your sales funnel—not previously aware. Committing to this trend however, means embracing the information age, and the highly connected, freely sharing, digital economy. Take a leap. See how leveraging YouTube, of all things, could help you make the transition. [Link back to read the full post]
“Robotics: the basis of a paradigm shift”
You must remember that revolutions are rarely seen or understood in the moment, much less the opportunities that surround them. As soon as efficiency became a discipline we were all predisposed to never look back. Robotics, as commonplace as it seems, is barely birthing in the grand scheme of things to come—and robots are “designed” to increase productivity. In the future, they “will do jobs we have been doing, and do them much better than we can. They will do jobs we can’t do at all. They will do jobs we never imagined even needed to be done. And they will help us discover new jobs for ourselves, new tasks that expand who we are. They will let us focus on becoming more human than we were.” —Wired [Link back to read the full post]
Last word:
And, you must have read from the most recent IB post: “The next 5 years could present unprecedented opportunity for the supply chain to capture the broad benefits of a real manufacturing renaissance.” Will you have the mind-set to navigate and prosper from inevitable change? It could mean the difference between struggle and success. Please stay tuned.
HIT Solutions believes the more your business keeps up with important trends, the more you will improve your product, and improve your bottom line. Leave me your comments below; share your thoughts.
Filed under: Management | Leave a Comment
Supply chains, out for the count.
If you survived the last five years you have to be doing something right. Think back to 2008 and remember the world’s largest economy contracting like a blown front tire by 3.9 percent (fourth quarter 2007 to third quarter 2009) marking the worst economic slump since the Great Depression and the first decrease(s) in the GDP in 17 years. In spite of all that, the manufacturing sector showed amazing stamina. By 2010, it added value of $1.7 trillion to the U.S. economy, rising 6.6% over the previous year (after accounting for inflation) and growing roughly twice as fast as the overall economy. We got sucker punched but then we got right back up. (Source)
Naysayers will argue we aren’t out of the woods. But the September 2013 Federal Reserve Industrial Production and Capacity Utilization report puts it at 99.4 percent of its 2007 average, just before the debacle. Several industry groups are seeing similar highs, construction lags at a scant over 81.9 percent of 2007 levels. It’s been and interesting fight.
What’s next? Renaissance or shadow boxing?
If you’re doing it right, you view current orders as recent history. You’re taking care and you count on repeat orders but you’ve got that in the bag so to speak. What counts most is how you answer the “what’s next?” question.
In light of that idea, there’s growing expectation for a kind of “manufacturing renaissance” coming down within the next 5 years. The heavyweight is China and, in this time, it is predicted that the celestial dynasty’s cost advantage will implode and many goods—those appropriate for U.S. manufacturing—will be reshored. Don’t expect a tsunami but all boats will rise if this tide rolls in.
Skeptics dismiss the “renaissance” plank as nothing more than cyclical factors driven by a normal post-recession recovery. Wall Street argrees most of the recent uptick, since 2010, in manufacturing employment and output, “owes to the usual course of the business cycle.” But in my opinion the critics rely too much on the usual suspects—big data perhaps. They use the big gloves and ignore significant signs there is something else going undetected.
Gene B. Sperling who is director of the National Economic Council and assistant to the President for Economic Policy is a major pundit for U.S. manufacturers. He acutely understands the value of the supply chain beyond its obvious heavy duty. Framing it from a government policy perspective, and making the case for the Obama manufacturing strategy, he recently offered his analysis of the value trend with a much more positive storyline. It helped me to broaden my perspective about the true social-economic impact of manufacturing and its supply chain. I share three rather disparate capsules of insight I skimmed from his paper “The Case for a Manufacturing Renaissance” just to start the conversation:
[It’s a long report but you may want to read it for the most accurate context]
1. On Paradigm shifts
Three paradigm shifts are needed to “provide a more insightful set of lenses through which to view the [actual] impact of manufacturing and the role of policy.” One example is a “shift from a large factory” standard “where continued gains in productivity lead some to perceive “silent factories” with few manufacturing jobs to a “supply-chain” paradigm which recognizes [all] the manufacturing and services jobs across integrated supply chains.” The view of manufacturing’s future as a collection of job-less, ‘silent factories’ misses the importance of these jobs.
2. Count the entire effect
“The McKinsey Global Institute estimated that there are another 5.7 million jobs in integrated manufacturing supply chains. Decades ago, when manufacturers relied more on in-house shops and services, these jobs might have been [rightfully] counted as manufacturing.” For example, today, when a company like GM uses an outsource which plainly rely on manufacturing, those jobs are counted as services jobs.” It’s a clear sign we are undercounting the employment effects of the broader supply chain.
3. Manufacturing punches above its weight
“Manufacturing plays an outsized role in our innovation economy.” Even beyond its direct contributions to the economy, economic studies show that manufacturing generates a positive economic and innovation spill-over that benefits both the specific communities impacted as well as the broader economy.
Labor economics experts Greenstone, Hornbeck and Moretti showed that as a result of a manufacturing plant moving into a community, the productivity of the surrounding firms improved 12 percent compared to a comparable community that did not receive new production, a concept referred to as ‘agglomeration spillovers.’” The numbers seem to prove it. Despite representing 12 percent of U.S. GDP, manufacturing accounts for roughly 70 percent of private sector research and development, 60 percent of all US R&D employees, over 90 percent of patents issued, and the majority of all U.S. exports.
The next 5 years could present unprecedented opportunity for the supply chain to capture the broad benefits of a real manufacturing renaissance. A period where you actually get counted for contributions made.
Last word:
HIT Solutions, the next 5 years
In retrospect it was a ballsy move to open the doors to business in October 2008. But HIT Solutions persevered just like you, playing the same silent but critical role in keeping America’s manufacturing—and its supply chain—running smoothly. What’s important is not that they lasted this tumultuous 5-year period but what they are prepared to do in the next.
HIT Solutions believes the more your business keeps up with important trends, the more you will improve your product, and improve your bottom line.
Leave me your comments below; share your thoughts.
Filed under: Leadership, Management, Operations, Strategy | 1 Comment
Tags: manufacturing, manufacturing-renaissance, paradigm-shift, supply chain
Earnings grow from enriched customer engagement
Demand for increased responsiveness is one trend we didn’t mention in the Bastard’s previous post, 21 Tipping Points (or Tripping Points). But for the supply chain the trend is real and the need for information is real-time. It’s a signal to lean from being simply efficient, to becoming wholly responsive to customers. In that post, I cautioned that identifying a relevant trend is one thing but “how you respond to the change, and then how you adapt your business” is what really defines your brand. The upshot is most of that “definition” is derived from perceptions you create. So you have more control than you might think. Particularly when you consider customers who are higher in the sales funnel, not previously aware of you. Committing to this trend however, means embracing the information age, and the highly connected, freely sharing, digital economy. Take a leap with me; let me show you how YouTube, of all things, could help you make the transition.
Change your focus; change your results
The trend toward responsiveness has been coming on steadily. However the challenge for most supply chains is their inability to affect the kinds of operational changes required to get that ball rolling. If you’re profitable and the culture’s working, why upset the apple cart, right? The chart illustrates how changing the focus toward the customer yields a different, positive result.
No doubt, a shift to a responsive focus could require fundamental changes in your culture, and, ironically, in your operations. I recognize that may be too much to ask at one sitting. Crawl before you run—that’s the key. Start practicing by pulling back the curtain a bit and let the world get to know you. Share your capabilities.
Start by creating the perception of transparency with video stories about your services. Then leverage the power of YouTube, the most ubiquitous TV channel in the world. It could be easier than you think to make short, authentic videos of your company, your process, your people and your product on a periodic basis. By allowing this kind of transparency you are taking the first step toward a responsive focus. Your customers get tired of pulling, it’s time you pushed.
Why YouTube?
YouTube is a video-sharing site that is also the second largest search engine in the world behind Google. For the supply chain, it’s an underutilized, largely misunderstood, strategic advantage, particularly if your competition is not leveraging it. It’s a marketing channel and another opportunity for your business to be seen and heard by your potential audiences. When you allow transparency, it suggests your business is more accessible which is a prerequisite for being responsive.
When you post videos you can also apply keyword tags, which improve natural search engine rankings and that increases your website’s visibility. Videos tend to be shared via emails more than pictures, written stories and papers. It’s also free and YouTube allows your company to create its own, unique, TV channel/URL address. It will host unlimited videos, track views and links to your videos.
Two supply chain video examples:
This first one is an excellent demonstration of simplicity and authenticity. However it does not appear to have a custom channel set up as yet. It has a casual, yet professional feel due to the standardized, branded title sequence.
This next one was produced by our brother company Accessa Coatings Solutions. And if you visit its YouTube page, you can see the custom channel set up. Better camera angles, sensitive lighting work and some additional polish in the editing makes for an interesting show visitors will remember.
How to get started?
Set up your free YouTube account online and choose a screen name (ideally your company name). Set up your profile with keywords about your business and upload your logo as an avatar. Keep in mind that you don’t need to allow visitors to see how many subscribers you have or what channels you subscribe to, etc.
Tips on making videos:
- Use a YouTube-compatible digital format
- Keep it short—one to three minutes are best
- Start with a standardized look to your intro so that all your videos can be instantly recognizable over time
- Use a good microphone; most built-in microphones lack the ability to get the clearest sound
- Be yourself; have your company leaders and employees be themselves. Anything less than genuine will be a certain turnoff
- Do not over-edit. A goof here and there shows that you and your company are made up of real people
- Limit the use of special effects, transitions and other distractions
- Customize the look and feel of your channel; you want to further your brand, not blend in with the crowd
Have fun with it. Remember, if nothing else a video marketing initiative will shake up the status quo and instill some pride in what you are doing.
HIT Solutions believes the more your business keeps up with important trends, the more you will improve your product, and improve your bottom line.
Leave me your comments below; share your thoughts.
Filed under: Leadership, Marketing, Online, Operations, Sales, Segmentation, Social Media, Strategy | 1 Comment
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