Next Generation Manufacturing

From Push to Pull, Manufacturing vs. Marketing

If your work life is spent fine-tuning the guts of a manufacturing operation, it’s easy to take satisfaction watching career marketers twist and spin from the astounding changes taking place in their formerly fashionable and attractive world. For 15 years, marketers have been lurching from the old-fashioned one-way “push” communication of advertising, to the demanding “pull” marketing that the Internet has enabled.

The satisfaction comes from knowing that manufacturing was a full revolution ahead; through equally stomach-churning effort, manufacturers have spent at least 30 years applying disruptive technology to better serve their customers through a transformation from push to pull.

What’s been most difficult for marketers and manufacturers alike is figuring out where customers’ needs are moving – and how to be ready for them just-in-time.

That’s where the marketers are suddenly pulling ahead. On the heels of the Internet revolution, Facebook, Twitter and all the other new outlets that now make daily headlines have forced marketers into the social media revolution. They are fast moving beyond the Internet’s pull marketing to achieve two-way marketing: ongoing dialogue with customers and prospects. The practitioners who are embracing this already recognize it as the best means available for staying one step ahead of market needs.

Manufacturers don’t have to be left out; that’s what Next Generation Manufacturing is all about.

Four of the NGM disciplines focus on increasing the flexibility to deliver what customers want:

• Process improvement
• Supply chain management
• Green/sustainability
• Engaged people/human-capital acquisition, development and retention

But the other two are more about understanding and anticipating those wants:

• Customer-focused innovation
• Global engagement

Like the marketers, manufacturing companies that have figured this out are already a revolution ahead. Some of the rest are already twisting and spinning.

By Bob Rosenbaum, Editor, The MPI Group

Stat of the Week: What Industries Seem to Place the Highest Value on Process Improvement?

The NGM Study asked: Rate your organization’s progress toward world-class processes and process improvement.

• The electrical equipment/appliance/component industry leads the way, with 52% of companies at or near world class. Close behind were primary metal manufacturing (51%) and plastics/rubber products manufacturing (49%).
• At the other end of the spectrum were printing and other related support activities, with 29% of companies at or near world class, followed by wood product manufacturing (32%).
• In the middle, from more world-class performers to fewer: transportation equipment, computers and peripherals, nonmetallic mineral products, chemicals, fabricated metal products, machinery, paper, food and furniture.

The World Would Like to Buy Your Stuff. Help Them.

It’s big, recovering world economy out there, but you wouldn’t know it by how U.S. manufacturers are focusing their growth efforts. Just 7% are world-class in global engagement (defined as “Secur[ing] business advantages by having people, partnerships, and systems in place capable of engaging global markets and talents better than the competition") and only 18% are even near world-class. In fact, many more (26%) report no progress toward world-class status.  This is short-sighted in the extreme. U.S. manufacturers who focus exclusively on their home markets — in sales and in sourcing — place themselves at a crippling disadvantage to more globally minded competitors both abroad and at home. Manufacturers who are at least near to world-class status in global engagement are fives times as likely to have increased non-U.S. sales by more than 50% over the last three years.

What’s your global expansion plan?

By John R. Brandt, CEO, The MPI Group

Stat of the Week: What’s the Payoff for Companies that Put a lot of Effort Into Developing a World-class Workforce?

The NGM Study asked: What is your value-added per employee ([sales-cost of materials]/number of employees)?

• 37% of those with world-class people engagement and human capital acquisition, development and retention strategies report value-added per employee of more than $125,000. That compares to just 24% of those furthest from world class.
• Only 27% of those with world-class people strategies achieve less than $75,000 value-added per employee – compared to 38% of companies furthest from world class.

The Difference Between Long-term Strategy and Long-term Results

It's no big deal for companies to commit to Next Generation Manufacturing-style strategies – game plans dedicated to achieving long-term growth and value. Most companies at least THINK they operate under such a plan.

But the difference between those that say it and those that make it happen is in way they talk about their values, writes Harvard Business School Professor Rosabeth Moss Kantor in her blog. Most manufacturing managers are able to talk about work experiences in which some C-level executive launched a Big Hairy Audacious Initiative – complete with a companywide rally, T-shirts and lapel pins – and then never mentioned it again.

Stories like this usually come from someone talking about a past employer; that's because such cynical displays usually do more to chase away talent than to focus it.

To walk the talk has become such a cliche that, as an expression of intent, it's meaningless. But when leaders are relentless in following through on those things that they say are important, results usually follow.

Companies that really mean it when they decide to become industry leaders in customer-focused innovation, or global engagement, or any of the other four NGM strategies simply perform better over time.

Wandering in the Dark About Green

Here are the key findings, according to A.T. Kearney, of a recent study by the Economist Intelligence Unit titled: Doing good: Business and the sustainability challenge. A.T. Kearney sponsored the study and makes it available for free download in PDF format.

• Businesses executives know they need to achieve higher levels of sustainability, but are often confused by such new and poorly defined demands.
• The conventional wisdom that North American firms lag on sustainability is partly deserved, but partly a matter of perception.
• Competitors are a key driver for change in North America; it's government regulation in the Pacific Rim; and in Europe sustainability is driven by consumers.
• Many companies lack clear leadership on sustainability.
• The supply chain is the weakest link.
• Sustainability reporting needs more work.
• Sustainability pays – and a correlation appears to exist between corporate action and strong share-price performance
• Gains can be expected from cost reductions, new markets and enhanced reputations, although there are still concerns whether the return is worth the initial cost.
• Increased investor attractiveness is not yet a key hook.
• Business leaders are open to more regulation on social and environmental issues.

Supply-Chain Storytelling

You’ve probably experienced how a story can change as it passes from person to person. Eventually it doesn’t even resemble the initial story as each subsequent storyteller embellishes or misinterprets facts and facets. This story of stories plays out every day in supply chains as OEM orders get translated and disbursed into hundreds of components and materials and passed upstream to suppliers tier by tier by tier. Each order handoff is fraught with potential for errors and omissions, and the more urgent or unexpected the order, the greater the likelihood of problems that leave the OEM unable to efficiently satisfy demand.

That supply-chain problems like this can occur isn’t surprising considering the size, complexity and myriad metrics (e.g., quality, order accuracy, timeliness, reliability) and cost factors (e.g., carrying costs, transportation) that need to be addressed by often far-flung customer and supplier networks. What is surprising, though, is how many issues do arise, especially when there is unexpected customer demand for even existing products.

The Next Generation Manufacturing (NGM) Study found that 37% of manufacturers experience either “major” or “minor” delays in communicating demand signals throughout their supply chains, and that standard delivery times are not met and/or extra inventory is required to respond to an unexpected customer demand:

• 4% report “major delays communicating demand signal throughout chain and most suppliers struggle to efficiently meet demand — standard delivery times dramatically exceeded and/or excessive inventory.
• 33% report “minor delays in communicating demand signal throughout chain and some suppliers struggle to efficiently meet demand — standard delivery time exceeded and/or too much inventory.” 

Only 13% of manufacturers described their supply chains as advanced and fully able to respond to unexpected customer demand for existing products: “real-time communication of demand signal and entire supply chain flexible to demand spikes — standard delivery times consistently met and just-in-time inventories.” Another 50% of NGM Study participants report “efficient communication of demand signal throughout chain with most suppliers efficiently satisfying demand — standard delivery times nearly met and right-sized inventories.”

Most manufacturers today have attempted to improve their internal operations, reducing wastes, minimizing inventories and resources, and improving productivity; they’ve had little choice during the recession. Now is the time to begin looking beyond organizational walls. Supply chains and the handoffs between companies hold vast potential for improvements — and benefits — that can be mutually shared by suppliers and customers. Yet to tap into these opportunities, supply-chain participants need to apply best practices and processes that will allow them to quickly get the customer-demand story straight.

What’s your supply-chain story?

By George Taninecz, VP of Research, The MPI Group

Stat of the Week: A First Step In Global Engagement Is Often Establishment of a Sales Presence In Other Countries. Where Do You Fit In?

The NGM Study asked: In how many countries outside of the United States does your organization have sales and/or distribution facilities?

• 39% of manufacturers with world-class global engagement have such operations in six or more countries; that compares to just 10% of those furthest from world class.
• 25% of manufacturers with world-class global engagement don’t have any sales or distribution operations outside the United States, compared to 63% of those furthest from world class.

What BP Could Learn from the Next Generation Manufacturing Model

In a restrained and reasonable blog, Mallen Baker explains why the ongoing Gulf oil spill is just one step in British Petroleum's unintentional addition to the list of corporate villains. He goes so far as to predict that it may need to pull out of the United States entirely.

BP has long recorded astonishing profits, Baker writes. Those will likely be wiped out in the short term. But if BP eventually regains its profit-making power, it would be of great comfort it it did so through the disciplines of Next Generation Manufacturing:

Customer-focused innovation: Yes, development of deep-water-drilling capabilities is innovative, but who outside of BP really understood that it was rushing half-developed solutions into the marketplace?

Engaged workforce: Based on news reports, it appears that BP had people in the right places at the right times to implement the right processes to prevent a fatal and environmentally devastating explosion. But, also based on news reports, senior management chose to disregard their concerns. Having a history of such practices – which BP appears to have – is not the way a company attracts the best workers or gets the best out of them.

Process improvement: See above. And remember, process improvement is not what you call serial failures, on live webcam, to stop the worst oil spill in U.S. history.

Supply chain management: BP's initial reaction after the explosion was to blame its supply chain partner – the company that owned and operated the rig. While such blame may be due, world-class supply chain managers understand that partnerships at this level exist for the purpose of creating amazing results – not for the purpose of shifting liability when the results are disastrous.

Green/sustainability: BP has been a wonderful marketer of forward-looking, sustainable energy technologies. But the real heart of a sustainability program is not the headline-grabbing, research-driven great leap forward; it's the workaday effort to reduce waste and minimize the impact of operations. If BP was truly focused on that kind of sustainability, how many invaluable resources – money, human lives, oil and the other natural resources on which the Gulf Coast economy relies – might not have been wasted?

Gobal engagement: As a starting point, avoid doing things that result in criminal investigation and/or nightly segments on the The Daily Show with Jon Stewart.

By Bob Rosenbaum, editor

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Cenac - The Spilling Fields - Oil Leak Containment Ideas
www.thedailyshow.com
Daily Show Full Episodes Political Humor Tea Party

Using Training to Support Employee Engagement

If a key to a company's long-term success is a productive, forward-looking and engaged workforce, the big question is how to achieve that. Clearly, good hiring and solid retention practices are important.

But so too is what happens in the middle: training.

In a brief column at The Leader's Beacon, Kris Kiler provides 7 keys to a training effort that fosters and supports a high level of engagement.

Details on each of these are in Kiler's piece:

1. Ask participants to help design the training
2. Match the program to different personality styles
3. Be interactive
4. Consider generational divides
5. Bring together employees at all levels within the organization
6. Make it relevant by applying the learning to situations outside the organization as well as within
7. Use technology