Dear CEO – You Need Operations Help

Image result for image of hikingThe feeling is like climbing up a hill only to realize that the much bigger mountain is up ahead of the rise you just climbed.  You thought that all was well. The engineering team has working prototypes. Sure, they were made in the lab with machined parts and tape and glue, but they work. Customers are anxious to get their hands on units. Investors want to see the numbers. There is pressure to show revenue and to talk through the path to profitability. Reality hits. The questions start to pour in:

  • Who will build in volume? Do we start in China? Can we start locally and move later? Should we build in-house?
  • How much will it cost? Really? That much? Why didn’t I know about those adders?
  • How do they know what to build? Why isn’t our spreadsheet good enough?
  • How do we get our mechanical parts for much less? Tooling cycle times are how long?
  • What are the processes we should use to keep labor costs in check? Oh, we are not designed for automation?
  • How do we ship this product? Will our box withstand global shipment? How do we know?
  • Should we differentiate for different geographies? How many assemblies will that be? How do we structure? What about documentation?
  • Who will service our customers? Can we handle the volume of calls in-house?
  • Where do we hold our inventory? Who will fulfill? Who will export? What are the cost implications?

If these questions are coming up, you should have hired operations expertise already. If they haven’t yet come up, then act now. Ideally, the operations problems are solved in parallel with the design and both sides are influenced by the other. If done in serial there will be some rework. What are the options for a CEO?

  1. Hire a full time operations expert. In order to have the right breath of expertise the hire needs to be hands on and at a high enough level to have experienced all of the key elements of product launch. If this person is your first ops hire it will be a challenge to attract the right person who will remain the right person as you scale. This alternative might be the most expensive but the benefit is that you have a team player on board who is part of the company story and will provide continuity.
  2. Hire a consultant. Bring in someone(s) who has exactly what you need at exactly the right time. If you partner with the right consulting group you will be able to tap into a breadth of experiences and levels and can dial up and down the resources as needed. Ideally there should be a lead person who has the depth and breadth of experience. Bringing in experts will save you more money than you spend. Consider this an investment and an accelerator to volume.
  3. Hire a buyer and manufacturing engineer who have the experience and willingness to wear many hats. Supplement with your own operations leadership or with leadership from your VP of Finance or Engineering. The leadership can’t be taken lightly and you must honestly assess those skills. Don’t kid yourself. Launching a product into a supply chain is complicated and requires time and experience or costly mistakes can be made. You can delay hiring a VP or Director of Operations only if another senior leader has the time, experience and interest to lead. Or you can hire a consultant to act in this interim role.

Warning! Blatant promotion coming:  You should hire me as an operations consultant. I’ve worked in and with many start-up companies. I’ve seen costly mistakes made because the operations tasks were overlooked. I know what to look for and avoid. I would much rather help you avoid than help you fix and clean-up. I am a doer. I like owning things and delivering to the bottom line. I am a firm believer in understanding enough about the problem to ask the right questions. And I can smell discontinuities. I know how to proceed with gnarly tasks because I’ve had the experiences and possess the intuition to make this work instinctual. I know others in the field and can bring in the right person at the right time to solve the problem most effectively. Yes, you should hire me or someone like me if you have started to notice that there is a mountain of work ahead and you don’t have on good hiking shoes!

I don’t spend my time pontificating about high-concept things; I spend my time solving engineering and manufacturing problems.       Elon Musk

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OpsTrak Consulting      925-437-4125

 

I Know How it Feels

Council of the Baltic Sea States Summit 2012…when the handshake isn’t returned…when the answers to your questions are directed to the man in the room…when the good point you make is ignored until it is restated by your male peer…when eye contact is not made, invitations are not extended, emails are not returned, smiles are for the wrong reasons, hard work is not rewarded, …

As a woman executive in a technology field I’ve often been asked if it was harder for me to progress through my career as a woman. When I try to think of the big stories, I come up empty-handed. I was not blatantly discriminated against. No boss ever hit on me. I wasn’t asked to get the coffee or clean up the dishes in the break room. I have done well in my career. I started as an engineer and have been at the VP level at several exciting companies. Based on outward signs I’ve “made it”. But there is something not quite right about the journey that I only now am able to articulate and even now it is blurry and inconclusive.

The challenges faced by a woman in business are usually very subtle and thus are often dismissed or minimized. As a 30-year-old manager working with a Korean supplier I was surprised to find that the leaders would only talk with the men on my team. They would not shake hands with me. I had to convey my messages through the guys to get action. It was appalling and disheartening. But hey, this was another country with cultural hang-ups. It wouldn’t happen in the US…. But it did. As I rose through the ranks and engaged with other companies I realized that some men across the table did not make eye contact with me. Perhaps they answered my questions, but the answer was directed at the man in the room. At the end of the meeting there were awkward moments when I stuck my hand out with no response from the other. It was subtle. Maybe no one else saw. But I saw it and felt the impact.

The first reaction to a discriminatory snub is disbelief. That didn’t really happen, did it? I must be imagining. And then you try to write it off. It wasn’t personal. I don’t need to be bitchy about it. And then anger creeps in. What the heck. I was just dissed. Finally, you try to fix it. I’ll be more direct. I’ll call the guy on the phone.  A happy ending to this kind of cycle is when I pull the offender to my side. I show him my capabilities and he comes around. He listens and I’m given respect. Ah, but the energy expended takes a toll.

Next time I’m asked if it was harder for me as a woman I plan to say yes. But the stories aren’t grand and there is nothing obvious about the slightly steeper slope that I had to climb, but it was steeper for many subtle reasons.

I hope you will find some way to break the rules and make a little trouble out there. And I also hope that you will choose to make some of that trouble on behalf of women.”                              Nora Ephron, screenwriter

Made in USA: How We Do It Matters

house-of-strawHuff and Puff and Blow that Economy Down…

What is not to like about more US manufacturing? It is important to our economy, to national security and to the individuals needing jobs and purpose. A nation should be able to build the things that it needs. A hollowed out economy that is only exporting services is not a long term play.

But a revolution is not the solution. Shaming companies to come back is also not a simple anecdote. It took us over 20 years to dismantle our manufacturing prowess. We can’t bring it back overnight. Without some planning we will build a house of straw. We will alienate our trading partners. We will bring back jobs that we can’t fill because we don’t have trained workers. We will try to use the same processes and facilities we have always used and the result will be poor quality and expensive product. We will impact our economy because our goods will be more expensive. Finally, retaliation by other countries will slow down the exporting that we do today. The right way to bring back manufacturing is to consider all of the aspects of a strong foundation and to build a house out of brick. What will that entail?

  • Focus – What kind of manufacturing is right for this country? Given our higher standard of living we will not find enough workers for low skill tasks. The best products for re-shoring can be manufactured using automation, are high value or are heavy or bulky. Those kinds of products don’t rely on low wage workers and they cost a lot to move around. If the market is here you can eliminate shipping costs by building here. We also should consider where we can bring a competitive advantage. If we have access to materials and other natural resources, design expertise or automation capability we can do a better job than the competition and build product for the US market and also successfully export. Examples of good products for US manufacturing are appliances, vehicles, expensive electronic devices, machinery, robots and construction materials. It also makes sense to build close to home when a product is difficult to build and contains a lot of intellectual property. The interaction between manufacturing and design engineering is critical during a fast ramp and doing that close to home has time to market advantage. Time is money and fast to market protects IP.
  • Infrastructure – We need better roads and power and better access to human resource. State government officials in some locations are working on this. Kentucky, South Carolina, Tennessee  and Alabama are attracting more than their fair share of new manufacturing jobs because they have favorable policies, strengthening infrastructure and active government programs aimed at attracting companies. Each state needs to craft policies to attract the kind of industry that will be beneficial to the population.
  • Prepare the Workforce – In a 60 Minutes interview Tim Cook, the Apple CEO, said that one of the reasons that Apple needs to build phones in China is that the US doesn’t have a trained manufacturing labor force. The obstacle is not so great. If we package training with job opportunity at a living wage, the workforce will be available. Apple can not afford much labor content with this model but automation is a way around that roadblock. Increased automation will generate the need for other skills that we currently lack in the US. We need more manufacturing savvy engineers. We have the best higher education system in the world and there are many excellent programs that can meet this need. Those programs train engineers for the whole world. We can harness that momentum for our own workforce through part-time, online or even full time degree or certificate programs that are sponsored by companies in need of talent. This is an investment worth making and where some profit should be directed.
  • Government Support – Of course tax reduction is what comes to mind here and perhaps President Trump’s intention to increase the tax burden on companies importing goods will help fund education or infrastructure. But there are other ways our government can have a direct impact on a continuing manufacturing renaissance.
    • Training program sponsorship or tax credits
    • Increased community college support for practical apprenticeship type programs
    • Higher education support in the form of manufacturing and technology research grants
    • State or Federally sponsored manufacturing initiatives used to focus funds and research
    • Increased vigilance for fair trade 
    • Logical and sustainable regulations that solve for both competitiveness and the environment.
  • Leadership and Vision – When I worked with Canon, I was told that Canon just did not understand our actions. HP was making decisions for our stockholders. We were trying to minimize the tax burden and they felt that taxes were a patriotic duty. Losing jobs to China was a defeat and there was much debate prior to any movement of manufacturing. They believed that they could build the product with higher quality and with more process technology and therefore it would ultimately be less expensive. Perhaps we can’t turn public international companies into patriotic entities but with more visionary leadership and more action that drives innovation and competitiveness right here in the US,  companies can find a win for US manufacturing and for stockholders. The win is there. It will take leadership to invest in factories, commit to a plan that isn’t easy to pull off in the short term and then execute with determination.

There is a path to solid manufacturing growth in the US. It isn’t a move back to the 1970’s. We won’t go back to what manufacturing looked like then but neither will the rest of the world. The new era of manufacturing will be lean and automated. It will require an educated workforce and a supportive government. We will need the willpower and the leadership at high levels in government and industry to take a stand and to chart a path to a successful win-win future where the consumer gets a good “Made in the USA” product at a competitive price.

“All human situations have their inconveniences. We feel those of the present but neither see nor feel those of the future; and hence we often make troublesome changes without amendment, and frequently for the worse.”     Benjamin Franklin

Audacious Manufacturing

brave

Let’s be Audacious.

  • Smart Manufacturing takes advantage of data to drive processes, designs, build plans and quality checks.
  • Automation lowers costs and increases quality.
  • Additive Manufacturing helps us build product we couldn’t otherwise build and enables fast time to market.
  • Lean Manufacturing optimizes resources, removes waste and increases visibility.

All of this is great stuff. Let’s embrace all and become Audacious Manufacturing. If you are audacious you are bold and daring. Manufacturing is often just the opposite. Manufacturing executives tend to be cautious and careful. We don’t brag. We let the results speak for themselves. Manufacturing people get the job done but we let the marketing people advertise and the sales people sell. It is time for the manufacturing community to be bold and brave and to market and sell what we can bring to the economy and the country. We can compete globally and are doing it in many sectors already.

As a young intern engineer, I modeled transmissions, wrote papers on transportation alternatives and developed engine combustion simulations, but nothing beat the time I spent working in the Pontiac, Michigan plant where GM trucks are built. That drove my decision to take a job in manufacturing after graduation. I love walking through a manufacturing plant where parts are assembled and products are tested and readied for shipment. Cars, computers, storage systems, networking systems, printers, construction materials, medical equipment: I’ve been to these factories around the world and get the same kick each time. Seeing these plants in the USA brings me even more joy but for many more reasons.

Manufacturing strengthens our economy, creates jobs at a faster rate than other sectors and keeps our creative juices flowing for new idea generation. It brings communities together and keeps us ready as a nation to protect our country. Manufacturing uses a broad set of talents and welcomes a diverse population into its employment. It generates supportive industries that supply parts and provide logistics.

If we as a country embrace smart, lean, automated, additive manufacturing and add a dash of audacity, we can indeed strengthen our manufacturing base in the USA. The manufacturing in this audacious new world can be the best internationally. We have the technology, resourcefulness and the capability to do it. We need to come together across party lines, economic strata and geographical areas to drive policy, education and consumer willpower.

Opportunities multiply as they are seized.  

Sun Tzu;  Art of War

 

A Wolf Tone in the Workplace

cello1Is a dissonance good or bad? Does it add a richness to the output or does it detract? If you play a stringed instrument you are familiar with the “wolf“. This is an overtone produced when a note is played that matches the natural frequency of the instrument. The wolf is an oscillation that sounds like an animal noise. It is annoying for a cellist or violinist and it is often dealt with using a “wolf eliminator”. If a cello is properly proportioned it will have this problem. It seems that the very best instruments have this characteristic. Many musicians buy eliminators to dampen this noise. But some cellists choose to embrace this flaw and actually write music with the wolf in mind. Naldjorlak I is a piece that capitalizes on the wolf tone. Some cellists work around and with their cello’s wolf tone rather than putting an eliminator on the instrument for fear of dampening the richness of the other tones. Perhaps they have discovered that a little dissonance can be used to advantage.

In our workplaces we often find annoying “characters”. They find a way to stir things up and call to attention all that is wrong. Often they are different from the rest and don’t blend in with the gang. There are several ways to deal with this kind of person and each way has its consequences.

  • Kick ’em to the curb: There is no time for people problems. Teamwork is the highest priority to get the job done. If this is your situation then eliminating the annoyance will optimize the team’s output. You can try to coach and cajole but you will likely not get to a place where this “wolf” is tamed. Dissonance will persist. However, if you eliminate the problem it is likely that you will also eliminate a skill or set of experiences that created some synergy for the team.
  • Ignore and let the organization work it out: Usually the people with the annoying habits or ideas have something to bring to the table or they wouldn’t have been hired. They have deep experiences or unique skills. Perhaps they are jaded and maybe they have some quirks based on that experience but they are tolerated based on what they bring to the team. Letting the organization work it out is a typical management response. The logic is that there is more benefit than harm and everyone is a grown-up. The organization should work out their differences and move on. This response usually results in inefficiency and frustration. In the extreme the result is the loss of good people.
  • Harness the wolf and find synergy: This third alternative creates the most organizational value.  Different styles and personalities will usually bring the best results. Dissonance and disagreement will help deliver a stronger product. However, there is a technique to optimizing the result and the best organizations work to maximize teamwork while maintaining differences.
    • Teach the team about their own and other’s personalities. Techniques such as Meyers Briggs and Strength Based Leadership are often used to help a team figure out how to optimize their own strengths and quirks while working with others.
    • Allow for disagreement, but then insist on a “commit”. While at Sun I worked with a leader who used the phrase, “disagree but commit”. He was tolerant of discussion and disagreement up to a point. Once the decision was made, he insisted on commitment to the decision with no back-channel negatives.
    • Lead through the dissonance. Purposefully designing an organization that has differing views is a way to enhance results but leadership is needed to guide discussions and allow for a reasonable tension without too much delay. A leader who is self-confident and knows how to bring out the best in a group of people is hard to find but once in place this type of person will be a star.

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
― Rob Siltanen

Disfluence: Learning is a Mess

Image result for image of writing in finger paintsI always carry a notebook. This has been part of my work life since its inception. I’ve always known that if I write it down in my messy handwriting, I remember it better. Even when I’m told in a meeting “No need to take notes; I’ll send you the PowerPoint”, I still take notes. Sometimes I do it self-consciously since it seems I’m the only one with a pen in the room. But it helps me soak in the information. Now that I understand the concept of Cognitive Disfluence I will pull out my pen with pride. Cognitive Disfluence is a fancy way of saying that you learn more when you interact with what you are trying to learn.

In 2011 a study was done at Princeton. Subjects were asked to read about complicated, fictional biologic taxonomies. One group read in the common Arial font and the second read in Comic Sans MS. The group that read in the more unusual font remembered 14% more. This study has been done in a number of ways and the results are the same. The same concept is true with numbers. If you have to graph the data yourself on a piece of paper, it will stick. If you do the math by hand and not with a calculator, you will remember it better. If you punch in someone’s cell phone number a few times into your phone, you will remember it.

Humans are meant to interact with their surroundings. Our brains are wired to forget the easy stuff and hang on to the stuff we wrestle a bit with. Knowing this can help us absorb the data and information that comes barreling at us day in and day out. Below are some ways to better grab onto what is flowing past.

  • Use the whiteboard: For those of us working in offices whiteboards are ubiquitous. Have you noticed that some people are fast to jump up and use the board and others hang back? Be one of those board doodlers. As a discussion progresses, note the key points. Write down the dates and make a timeline. Assign owners. Draw a picture of how it works or who is connected to whom. If you are the leader of the meeting feel free to hand over the pen to others to pull them in. You will find that the room is more engaged and that the concepts are remembered. You and your team will think about this meeting more than most because the team was actively engaged.
  • Take notes in meetings, during the lecture or sermon, as you read: Keep a notebook close at hand to jot down something that inspires. Draw a picture of the image that comes to mind. Even if you are doodling or writing key thoughts or names, this is enough to engage a different part of your brain and you are more likely to retain what you are hearing.
  • Graph out your expenses or revenue or miles run over time: I’m a big proponent of dashboards in business. These simplify the noisy data and give leaders key performance metrics to be sure that they haven’t lost control. But the very best way to get to this information is by graphing it yourself. Those shop floor charts where the data is added one point at a time (remember TQC?) are the best. Maybe a good combo is to look at and manipulate key pieces of information. If you see the trends going in the wrong direction dig down a level. See what the key contributors are and normalize by doing some math.
  • Write a list of things to do: Lots of us have “to do lists”. Crossing things off feels so good. But maybe the act of writing something down puts it into our heads to complete as well. We think about the task, consider how big the job is, break it down further and actually visualize the act of doing it.
  • Write stuff on sticky notes and move ’em around: A Kanban board or Scrum board is used in businesses to track, prioritize and pull through work. There are tools available to put this online and manipulate virtually but many companies and teams find that a good old fashioned white board with columns and sticky notes work the best. Why? Because you are engaged with the work. You can write on it. Add thoughts and move them around.
  • Argue from another perspective: One of the most interesting “features” of our brains is the tendency to find and stick with a simple frame of understanding. This saves us time. It helps us get through the day. We know how to drive our cars without a lot of brainpower. We can get ready in the morning without being totally awake. We have a perspective on life and we filter everything to comply with that perspective. The downside of this is that we don’t easily learn and change based on new information. We are blind to changes that can be very important in the running of our businesses or families. To shake ourselves out of this rut, try re-framing a situation by taking the other side and arguing it. It is helpful to hire or befriend people who are not going to simply feed you information that you already know or agree with.

The most successful people are ones who are exceptional learners. They digest new information, absorb new insights and aren’t afraid to look beyond their frames of reference. Many of these successful learners try crazy new things just to shake it up. Resolve to get out of your comfort zone and amp up your learning.

Learning is an experience. Everything else is just information.        Albert Einstein

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Marcy Alstott is an Operations and Supply Chain Consultant with diverse product and technology expertise, multinational management credentials and extensive transformation know-how.  

Email: malstott@opstrakconsulting.com

Website: www.opstrakconsulting.com

Fair and Good Trade

datsunI made the trade for a Ford Taurus. By then my little red Datsun 210 had traveled from California to New Hampshire. It had carried me through my masters degrees, my early career days, into a marriage and kids. The seat fabric had rotted and split. The paint finish was crackled and faded. A family of mice had decided to store dog food pellets in the fabric roof lining. (We have ever since stored dog food in metal cans!) But this car meant something to me and it was a hard possession to give up. But I needed a car that didn’t slip and slide in the snow and that carried me with a little more dignity to my engineering manager job. So I made the trade. It was fair. It was good.

These days, in the midst of isolationist leanings, there is a great deal of talk about fair trade. The treaties that were enacted over a decade ago are being blamed as the root cause for all of our economic woes and lack of full employment. The US has 14 trade agreements in effect with 20 countries. We are in the process of examining and likely will be rejecting an additional Asia-Pacific trade agreement, known as the Trans-Pacific Partnership (TPP) Agreement and are in negotiations with the EU  regarding the Transatlantic Trade and Investment Partnership (T-TIP). Why are these agreements in place and are they fair and good? 

The argument for international trade agreements is that they reduce barriers to U.S. exports and protect U.S. interests and enhance the rule of law in partner countries. The reduction of trade barriers and the creation of a more stable and transparent trading and investment environment makes it easier and cheaper for U.S. companies to export their products and services. This is goodness if both parties have something valuable to exchange and if each side ends up satisfied with the arrangement. Right now in the US we are not satisfied. We have lost over 5M manufacturing jobs since the beginning of the century. Our annual trade deficit was $500B or 3% of the GDP last year. That money is used by foreign investors to buy real estate or businesses or other assets. But these stats don’t tell the whole complicated story. The complex story makes the solution complex. The WSJ covered this recently in an article on the Future of Manufacturing. If we close our borders to trade or if we heavily tax imports to slow down in the influx of goods, there are consequences.

  • We export more services than we import to the tune of about $300B. If we slow imports we could slow exports of our service industry thus hurting those US businesses.
  • If we tax imports of cheaper goods we are creating a regressive tax. In other words we will hurt the people with smaller incomes who can’t afford it.
  • We could lessen the value of our currency making imports look more expensive but that again will be a regressive action, hurting the wrong people.
  • Moving quickly could cause an economic backlash that could push the US into a recession.

None of the ideas above are easy to implement without repercussions. But we can take positive action to increase our competitiveness and move back to a positive trade balance. However, these ideas require leadership, partnership with government, some patience and a bit of altruism. We as a country seem to be short on those things right now.

  • Measure the costs: Company executives should measure the full, true cost of off-shoring. Doing the math rather than just following the crowd could accelerate the trend to keep manufacturing in the US.
  • Train workers: There is a gap between manufacturing workers needed versus available even today. This gap will increase as our baby boomers retire. We need to create training programs and apprenticeships like are available in Germany and other countries.
  • Embrace Technology: There are ways to improve our competitiveness and the time is ripe. Additive manufacturing, Internet of Things (IoT) and collaborative robotics are ways to use our technical prowess to beat the competition. US universities have developed and progressed these capabilities and progressive companies are employing them to improve productivity and features. The government should encourage investments in manufacturing technology. US incentives for investments in factory automation and research lags behind our competition.
  • Employ Lean and Agile Methodologies: Productivity in the US (GDP/hour worked) has increased year over year for 3 decades. In the first quarter of 2016 it actually decreased by .6%. We need to find ways of doing more with what we have. Lean for Manufacturing and Agile for Innovation are two proven ways to improve efficiency and speed up results.
  • Create Manufacturing Ecosystems: Regional governments have been encouraging a resurgence of focused manufacturing capabilities. Examples are the growth of automotive manufacturing in the Southeast or capital machinery in the Midwest. These clusters are attracting the right kind of workforce, setting up supply chains and are working with regional governments to create workable tax schemes.

We will not rewind time to the days when you could provide for a family and retire on one assembly worker’s wages. But it is possible to generate a good living with the new jobs that are emerging. A robot technician’s salary is about $60K.  A CNC programmer and operator earns about $40K. With the right kind of training and infrastructure we can revitalize manufacturing in the US and embrace good and fair trade once again.

Good and fair trade is within our reach. I gave up my Datsun with thoughts of better driving days to come. Similarly, we need to let go of the past and embrace a new manufacturing reality of automated factories building products the rest of the world will want to buy.

Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.      Barack Obama

Trickle-up: A Path to US Manufacturing

fountain2This is not a political post. It is a call to personal reflection and action. Politicians and policies can help change the rules but we are the change agents in our companies. We have gutted our manufacturing prowess here in the US. We can blame trade agreements, tax burdens, short term quarterly reporting or politicians. But we also need to look at executive leadership. I am guilty. I’ve been a manufacturing executive during the biggest downturn in manufacturing…ever. Since the 90’s we have been shuffling manufacturing off-shore at an amazing rate. We have lost over 8M manufacturing jobs since the peak in 1979 with most moving to Asia since 1999. While this trend has slowed and there is some evidence of a reversal (~800K net increase in manufacturing jobs returning since 2010), it isn’t enough and we need to take action. The economics are just about there. What isn’t clearly showing in the numbers yet is the longer term benefit of having a return of the manufacturing base. I call this a trickle-up effect.

Trickle-up is not a new term but is new in this context. The trickle-up effect or fountain effect is an economic theory used to describe the combined demand of middle-class people to drive the economy. The theory is credited to John Maynard Keynes early in this century. Because each manufacturing dollar supports $1.33 in output from other sectors, it creates a trickle of economic value. Manufacturing has the largest multiplier of any other industry sector. Reshoring is a way to multiply jobs and economic value for our country. In addition there are intangible business benefits like increased creativity, faster time to market and increased customer responsiveness.

The late Andy Grove said in a 2010 New York Times essay, that what creates tech employment is scaling. “Scaling is hard work but necessary to make innovation matter.” And now scaling is not happening in the US. The big tech legends like Intel, Tandem, HP, Sun, Cisco all scaled in the US when they started. Then we shifted manufacturing to Asia. Now, companies like Foxconn and Flextronics build our electronics products with millions of engineers, technicians and managers located in Asia. Let’s tune our innovation engine to include scaling. Tools such as additive manufacturing, collaborative robotics and IC manufacturing equipment are developed here. Let’s use them here.

If we agree that it is best for our country to bring these jobs back, how can we accelerate? We need to examine our decision criteria. In some cases the numbers are in our favor already. In other cases we need to take action as leaders to change the equation. Here are some practical actions to take:

  • Calculate the total cost of manufacturing before deciding where to build. Labor costs have increased in Asia and have decreased in the US. Energy costs are competitive. In some parts of the country the real estate is less expensive and local governments are interested in attracting industry by offering tax breaks. Automation can be used to increase quality and increase efficiency further. The Reshoring Institute has developed a Total Cost of Ownership (TCO) estimator that is free to use.
  • Assign a value to time. Manufacturing close to a development team accelerates time to market. Learning quickly through rapid prototyping and iterating designs based on real manufacturing input will shorten your time to volume manufacturing and that in turn gives you an edge over the competition. If your product goes to market 1-2 months faster, what is that worth?
  • Value Superior products. New technology needs an effective ecosystem in which technology accumulates. This happens between functional areas and between inventors and makers. We are missing an element of the creative process if we don’t include manufacturing in the cycle. It can be done with Asian partners but it often isn’t. Designers often don’t even see their product being built. They don’t interact with the builders of the product and they learn only through second-hand feedback.
  • Consider the cost of quality.  Ideally when there is a failure early in a product launch, it is quickly understood and either the product or the process changes to avoid that failure the next time. Tight feedback between design and build is the key to this rapid improvement process. Proximity matters. It doesn’t guarantee the close interaction between design and build but it takes down an obvious barrier.
  • Lower inventory levels.  Do this by moving manufacturing closer to the demand. This has been called “next-shoring” or “right-shoring”.  Companies can respond to changing demand because there is less inventory on its way. The need to commit to next season’s fashion a year ahead of time goes away. Colors, fabric, quantity, sizes can change as demand is better understood.  Inventory is expensive to store, ship, scrap and obsolete. The money saved by placing build close to demand can be taken to the bottom line. Companies like Nike, GE and Brooks Brothers are working on “next-shoring”.
  • Train. One of the biggest gaps we have is the readiness of our workforce for this strengthening in US manufacturing. As business leaders we should be readying our workforce to take on manufacturing jobs through apprenticeship programs, on-the-job training, internships, partnerships with local colleges and universities and funding for skills training.

Increasing our manufacturing base in the USA will trickle up jobs and prosperity. The jobs are good ones and they are multiplicative. Job creation matters. We have an financial obligation in business to sustain the society and infrastructure on which we depend. It isn’t altruistic. It is a long term fiduciary obligation. Our children will be better off. What kind of world will this be if we only have highly paid professionals designing products and the rest are unemployed or serving those who are highly paid? We need to take action to bring manufacturing jobs back to the US. It is the right thing to do.

Be courageous. I have seen many depressions in business. Always, America has emerged from these stronger and more prosperous. Be brave as your fathers before you. Have faith! Go forward. Thomas Edison

Step It Up

Image result for international women's dayOn March 8, 1917 women in the city of St. Petersburg marched in the streets to end WWI, food shortages and the rule of czars. This International Women’s Day event was called a march for “bread and peace” and it kicked off a revolution. In 1965, March 8th was declared a national holiday in the Soviet Union, meant to recognize the heroism and selflessness of women and to celebrate the contribution made by women toward the establishment of peace and freedom. Since then the holiday has been adopted across the world and is now a day to reflect on progress made by courageous and inspiring women in all walks of life. Google’s doodle  today is a montage of the many roles and the many possibilities for women. And what wonderful possibilities there are!

This year the United Nations called for Gender Equality by 2030. At the rate we are currently going we will not achieve parity across the world until 2095. We need to step it up.

Some key targets of the 2030 UN Agenda:

  • By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and Goal-4 effective learning outcomes.
  • By 2030, ensure that all girls and boys have access to quality early childhood development, care and pre-primary education so that they are ready for primary education.
  • End all forms of discrimination against all women and girls everywhere.
  • Eliminate all forms of violence against all women and girls in the public and private spheres, including trafficking and sexual and other types of exploitation.
  • Eliminate all harmful practices, such as child, early and forced marriage and female genital mutilation.

Let’s join in to support these goals and step it up to achieve gender equality. You can pledge your support here: PLEDGE SUPPORT. You don’t need to pay anything, leave an email address, sign your name. You just have to say you will participate in change.

Let us devote solid funding, courageous advocacy and unbending political will to achieving gender equality around the world. There is no greater investment in our common future.  UN Secretary-General, Ban Ki-moon

 

 

Hire a Learner

When I was 20 years old I worked at GM as a co-op student in their tech center in Michigan. While working on the engine dynamometer, I met Bob and Hank. They were technicians of the highest caliber. Both were Cessna pilots. I tagged along a couple of times and for my birthday at the end of the summer Bob asked his instructor (he was getting an instrument rating) to give me a lesson. I couldn’t stop there and when I had my own funds a couple of years later I got my pilot’s license in California where I moved after graduation. There was nothing quite like the challenges of reading maps, mastering the radio, understanding the plane and knowing that controlling that airplane was in my hands. The learning curve was steep and worth it.

Years later I’ve mastered much that has involved starting from nothing and ending with taking control. The skill of learning something new is the most valuable arrow in my quiver. Nothing beats the adrenaline around figuring something out especially when the stakes are high. While I continue to learn even after decades in the working world, I see others in the workplace who are not so willing to jump into something new.  Often, managers and recruiters bias toward hiring those who have been there and done that. Some proven skill is necessary but not sufficient. The best employees are those who are curious, unafraid and driven to learn. When hiring, look for and ask about these things:

  • Adaptability – Ask your candidate to tell stories of transition. Dig when you hear about something that was tough to overcome. What did she or he do when placed in an unknown situation? International travel, cross-functional projects and joining companies involved in a new technology are fertile grounds for stories of adaptability.
  • Growth – An exceptional candidate will show a track record of jumping into new challenges. There is value to longevity in companies and roles but be careful when someone has only moved on when forced. A curious learner will look for ways to stretch and will not be satisfied in a stagnant job. When relating accomplishments, a learner will enthusiastically talk about the journey. Ask questions. (e.g. What challenged you in that job? What skills were mastered? How are you better prepared now because of your history? What attracts you to this job?) Answers should point to a growing set of skills and experiences and an aptitude to learn and change.
  • Emotional Intelligence (EQ)- This term was developed by Daniel Goleman in 1995. The book by the same name describes EQ as an ability to recognize one’s own and others’ emotions and to use that knowledge to guide thinking and behavior. This is closely correlated to learning agility especially as it relates to how you react to your own emotions. Fear can be an inhibitor to learning. Recognizing those butterflies in your tummy as something you’ve felt before and have worked through keeps you going forward. It is easy to let those feelings of uneasiness slow down your growth and learning.
  • Curiosity – The most valuable colleagues with whom I’ve worked have an insatiable curiosity. They aren’t stuck in their pay grade or functional slot. They reach outside of their comfort area to ask questions and to understand context. They sit at the lunch table with others in the company and learn about projects, technology, marketing launches, financial challenges. They combine their EQ with their curiosity to pull out information from others. They sincerely want to know what is going on outside of their cubicles. Hiring someone with this trait will land you a cross-functional connector. That person is worth her weight in gold.

Live as if you were to die tomorrow. Learn as if you were to live forever.

Mahatma Gandhi