Where Is Manufacturing Going?

 

Recently I hade the opportunity to make a presentation to manufacturers at the Business Modernization and Technology Conference in Indianapolis, and a number of things struck me as interesting. About the same time a friend of mine who has a son who has decided to go into engineering at Purdue University ask me about the future of careers in engineering.

 

I am trying to sort it all out. One speaker at the conference shared the story that General Electric had started using the Six Sigma approach to continuous improvement in 1995. And in one recent year their annual revenue was approximately one hundred billion dollars. In that same year they calculated that they saved 2 percent of their revenue by eliminating waste using the Six Sigma methodologies. That is not a bad effort -- save two billion dollars.

 

In the session when I was presenting my paper, I asked all the participants to write down the percent of their work day and resources that are wasted -- everything from rework and scrap to bidding on jobs they didn’t get and having to fire employees. We put their answers on 3 x 3 sticky notes and made a consensogram that looked something like this.

 

100

90*

80**

70**

60***

50*****

40*

30***

20**

10*

 

The people in my session on average wasted more than half their time and resources. This seems extreme to me. Perhaps the folks in my session were more enlightened than most and realized that much of their job is devoted to putting out fires rather than producing product, planning for the future, and making things better.

 

Pervading the whole conference, however, were conversations and questions devoted to how can we stay in business. One small foundry owner confided to me that he didn’t know how long he could hold on. He said that one foundry a day is closing in the United States, and the business is going to China. He was standing there with his son who he wants to take over the business when he retires. Another person told me that they are losing titanium fabrication business that they used to do for General Electric, because it is now being done in Hungary.

 

State Senator David Ford was the keynote speaker at lunch. His whole message was what he and others in government were trying to do to keep manufacturing in Indiana. It sounded like a challenging job and maybe too little too late.

 

So what do I say to my friend whose son has decided to go into engineering? Well it appears from what I heard and saw that most businesses have dramatic room for improvement that could translate into profit on the bottom line. If manufacturing can keep relentlessly getting rid of the waste in their businesses, there is a chance of survival. So there may be opportunities for mechanical engineers (which is what my friends son wants to major in). But at the same time, I am going to tell my friend to advise his son to take all the liberal arts and business courses he can so he will have a broader possible education from which to draw.

 

What will the manufacturing sector in the United States look like in 30 years?