Industry Market Trends
Manufacturing Leadership Summit: Reimagining Industry's Role
May 15, 2013
American manufacturing is facing a critical need for innovation and bold thinking that has less to do with technology or new products than new ways to consider manufacturing as a business, raise its standing as a career option for workers, and improve how it delivers products to customers, as highlighted in the 9th Annual Manufacturing Leadership Summit. The need for innovation was the key message at the opening session of 9th Annual Manufacturing Leadership Summit yesterday. Led by Frost & Sullivan at the Breakers Resort in West Palm Beach, Fla., the event drew nearly 300 senior-level executives who discussed ways they are trying to change the game for U.S. manufacturing. In the keynote address, David Brousell, global vice president and editorial director of Manufacturing Executive at Frost & Sullivan, told attendees that while the industry still faces numerous political and economic challenges, the outlook remains encouraging due to improving home sales, the decrease in unemployment, recent record-breaking stock market performance, and "the spirit in this room today." Brousell urged attendees to think about manufacturing's role in society and its potential to improve the human condition. He reminded the audience that not only is manufacturing still "the engine of the economy," it's also responsible for pulling the country out of an agrarian society and spurring urbanization. Sadly, though, manufacturing continues to suffer from a widening skills gap. "The public, while recognizing the importance to the economy, does not see it as a desirable place to work," Brousell said. He called for manufacturers to unite together to alter the perception that manufacturing jobs are "dirty, dangerous, dumb, and disappearing." He called upon industry leaders to spearhead a national advertising and public relations campaign to "tell the story of manufacturing today, relentlessly and forthrightly." While he saluted President Barack Obama for putting more emphasis on manufacturing than any recent president, Brousell insisted that industry have a "cabinet-level presence" in the form of a Department of Manufacturing with a Senate-confirmed secretary and a formal manufacturing policy. Even if all that happens, manufacturing will still need to adapt, Brousell warned. The industry needs to stay on top of "the mother of all mega-trends": the rapid growth of information technology, which is transforming local and global business, as well as reshaping the way businesses interact with customers and governments. Brousell then introduced John B. Rogers, Jr., founder and CEO of Arizona-based Local Motors, who presented his company as an example of how manufacturers can think differently about their business and their relationship with customers. Rogers admitted that change is frightening, claiming that even President Gerald Ford "bemoaned the loss of craftsmanship to get to the scientific process of manufacturing." But it was with this level of change in mind, Rogers said, that he created a business model around the three key elements of product creation: design, build, and sell. Or, as he calls them, "the Forge," "the Microfactory," and "the Shop." Local Motors has created an online community of fabricators, engineers, designers, and enthusiasts through which anyone can provide a design in response to a market need. Others can comment and provide revisions and suggestions until a final design is selected. Local Motors then goes directly to production - eschewing prototypes - by manufacturing in limited volumes of only a few thousand. A model like this, Rogers insisted, addresses "customer variability." In simple terms, customers don't always want the boxed solution, instead seeking products that address very specific and individual needs. Accounting for variability allows a company to be more agile, and drastically cuts cost and time to market. For example, it takes five to seven years for most car companies to go from a "clean sheet" to a market-ready product, according to Rogers, but Local Motors completes the process in an average of 18 months or less. For those who don't believe that manufacturing design and engineering can be crowdsourced online, Rogers warned that it was also once thought that people would never buy clothes on the Internet. Now, companies like Zappos, with video descriptions direct from the designer, customer reviews, and flexible return policies, are creating a better experience online than most people would get in the store.