Is America Suffering From Manufacturing Complacency?

February 28, 2001
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Twenty years ago, manufacturing companies in corporate America were fat and happy. They had a lock on the American markets as well as a number of foreign ones. They specialized in batch manufacturing and mass production, and while still inefficient, they were profitable.

But by the end of the 1980s, something had changed. Overseas competition had forced American manufacturers to go back to the table and formulate new strategies. Lean manufacturing and just-in-time methods became the norm. Focus was redirected on quality, rather than volume. By the end of the 1990s, American manufacturers were once again on top. Now it seems like everything is well and good. But is it?

“My fear is that we've peaked and now are starting to slide back,” says Dan McDonnell, president of the Association for Manufacturing Excellence (AME). “After the debacle of the mid-80s, American manufacturers started to concentrate on quality and innovative manufacturing methods. So much so, that it was the prime focus in the battle to stay competitive.

“A couple of years ago, several new emerging thrusts came into play including globalization, e-commerce, e-business and contract manufacturing. These became the competitive weapons of corporate America. Thus, the heavy-handed corporate focus on shop-floor manufacturing excellence had shifted. While the importance of manufacturing excellence is still being touted, without pressure from the top, many manufacturing managers are now either being driven hard into these new thrusts, or are lowering their bar on the pursuit of excellence. It's this complacency that is now endangering the American manufacturer again.”

The Quality War

McDonnell has been involved with AME for the past 10 years and works full time as the manager of global operations for General Electric in New Hampshire. He is responsible for five manufacturing plants, so he knows first-hand the challenges American manufacturers face. He says he thinks that manufacturers approached the problems of the mid-80s like they were fighting a war, and while it appears they won, the fight may not be over.

“The quality war of the late 80s and early 90s came upon American manufacturers so quickly they didn't know what hit them,” McDonnell says. “It was like offshore competition suddenly showed up in their backyard with a way to produce and sell things at a price that was equal to the American manufacturer's costs. It scared the companies and forced them to push hard for speed and simplicity. It was a no-holds-barred war of revamping and retooling. By the late 1990s, Americans felt they had won the battle and decided to pack up and go home. Unfortunately, keeping the quality edge is more like a peacekeeping mission than a war. You have to keep at it indefinitely.”

A Quality Malaise

Instead of keeping focused on competitive manufacturing, McDonnell says companies are now spending their time concentrating on other areas, like globalization and e-commerce. For a long time, companies viewed their shop floors as the differentiator for quality and profitability. Their quality processes were supposed to trickle up to the highest levels of management. But with the spotlight no longer shining on the shop, a quality malaise has set in.

“What I see happening is the old manufacturing manager is starting to become more of an operations person and spending less and less time on the shop floor,” McDonnell says. “This means they are involved with tackling business and technology problems and dealing more with customers. Not that this is a bad thing, but it is forcing a lot of people into unfamiliar territory and, as a result, they are more concerned with learning new office skills as opposed to keeping ahead of the manufacturing curve.”

McDonnell says another problem facing manufacturing excellence is people are just plain tired of hearing about it. Managers have been bombarded with buzzwords like “just-in-time,” “kaizen blitzes,” “TQM,” “teams” and the like, and they are starting to become numb. Think of it as excellence exhaustion.

“Manufacturers need to apply a due diligence to their shop floors,” McDonnell says. “Humans have a tendency to drive to what they are being pressured on, and since some manufacturers are no longer pushing as hard on shop floor excellence, we are slipping. Without some sort of pressure, companies lose their drive toward excellence.”

McDonnell tells the story of a workshop AME organized a few years ago when it observed a phenomenon that was developing in the manufacturing world. Some of the companies that were featured by AME in best-practice workshops had lost their edge and were falling behind. Why had these companies disintegrated? McDonnell says it's partly because the pace of change in people, structure, process and technology took its toll.

Sustaining Excellence

“There are two different processes for excellence,” says McDonnell. “It's one thing to work on obtaining manufacturing excellence, but it's a completely different process to sustain that excellence. AME held another workshop a few years ago entitled 'Sustaining Excellence.' It featured the Blount Co. in Ontario, which had done a workshop about eight years earlier and was found to have maintained, and even improved, the excellence it had shown much earlier. The AME sought to discover how the company had been able to do this. What we found was it takes lots of work to sustain excellence, and the opposite of that has been occurring in some American companies that had achieved a measure of world-class capability. Business leaders thought that once they reached their manufacturing quality and excellence goals, they were done. But they are wrong because it's even harder to stay on top of the pack once you've clawed your way up there.”

Has American manufacturing changed over the past 20 years, or is it the same old fat and happy character just wearing better clothing? McDonnell says he thinks real progress has been made, but that progress is in danger.

“There still are preponderances of leading-edge and best practices in the global world of manufacturing, and people are still driving many companies forward. But it feels like there is more of an inwardness,” he says. “My advice is that companies need to be vigilant and continue to strive to develop the best and most efficient manufacturing processes that they can. If they ever stop, they will decline and fail. There are no rest stops on the road to success.”

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