Yesterday, President Obama announced the appointment of Ron Bloom as Senior White House Counselor for Manufacturing Policy. It was a fitting announcement for Labor Day. Bloom is well situated to take on this responsibility, having been both a union advisor and an investment banker. The job is essentially an expansion of his role as senior advisor to the President's Task Force on the Automotive Industry.
However, while the manufacturing czar job is a follow on to his role as the auto czar, it will call for a broader vision. The auto task force was focused on the viability of two companies. The manufacturing policy job requires looking at ways to transform an entire production process.
As I've said before, manufacturing is in the process of being transformed into a much more knowledge-intensive activity. The process is analogous to the transformation of agriculture. Agriculture did not disappear from the US, to be shifted to some other nation that continued to do things the way it had always been done. Agriculture was transformed; it mechanized (industrialized, if you prefer).
The key is not the output ("agriculture," "manufacturing," "service"). It is the production process that is important. During the industrial revolution, machine power replaced human and animal power. The key input was energy. Today, knowledge has become the key input (factor of production).
Transforming manufacturing will take more than restructuring a couple of companies. It will take restructuring the entire production process. One of transformations is through a "high road" strategy that puts its emphasis on all upgrading of the inputs to the production process: technology, worker skills and cooperative/collaborative organizational structures (see previous posting).
It also means changing the manufacturing mindset. As I have argued many times before, the line between manufacturing and services has blurred. But many companies seem still fixed in the industrial age mentality of turning out a large volume of a commoditized product. The very nature of the supply chain forces 3rd and 4th tier suppliers in to this mode. These companies are not involved in product design and innovation; they simply respond to specs and price. Changing that structure will be painful and disruptive. Trying to revive that structure will be futile.
Thus, one of the major tasks for our new manufacturing policy needs to be focused on the lower tiers. How does the policy help these small companies re-orient themselves to the 21st Century?
It will take a multi-fold approach. Let me suggest one set of activities--by no means a complete list, but some ideas. We need more research on the service-manufacturing linkage to understand the transformation. That would be an excellent part of the "services sciences" agenda. We also need to find creative ways that the smaller supplier can move up the value-chain to take advantage of this shift. We then need to instill this notion of the fusion of manufacturing and services into the Manufacturing Extension Partnerships. The MEPs were on the front lines helping small and medium size companies during the quality revolution. They need to be on the front lines of the innovation and "customer solution" revolution.
Mr. Bloom has a big job ahead of him. His task is made that much harder by the transformative nature of the challenge. If it was simply a case of restarting the machinery, that would be hard enough. Instead, he has to finds ways to change the machinery around - while it is still running.
I wish him all the luck in the world. He will need it.
However, while the manufacturing czar job is a follow on to his role as the auto czar, it will call for a broader vision. The auto task force was focused on the viability of two companies. The manufacturing policy job requires looking at ways to transform an entire production process.
As I've said before, manufacturing is in the process of being transformed into a much more knowledge-intensive activity. The process is analogous to the transformation of agriculture. Agriculture did not disappear from the US, to be shifted to some other nation that continued to do things the way it had always been done. Agriculture was transformed; it mechanized (industrialized, if you prefer).
The key is not the output ("agriculture," "manufacturing," "service"). It is the production process that is important. During the industrial revolution, machine power replaced human and animal power. The key input was energy. Today, knowledge has become the key input (factor of production).
Transforming manufacturing will take more than restructuring a couple of companies. It will take restructuring the entire production process. One of transformations is through a "high road" strategy that puts its emphasis on all upgrading of the inputs to the production process: technology, worker skills and cooperative/collaborative organizational structures (see previous posting).
It also means changing the manufacturing mindset. As I have argued many times before, the line between manufacturing and services has blurred. But many companies seem still fixed in the industrial age mentality of turning out a large volume of a commoditized product. The very nature of the supply chain forces 3rd and 4th tier suppliers in to this mode. These companies are not involved in product design and innovation; they simply respond to specs and price. Changing that structure will be painful and disruptive. Trying to revive that structure will be futile.
Thus, one of the major tasks for our new manufacturing policy needs to be focused on the lower tiers. How does the policy help these small companies re-orient themselves to the 21st Century?
It will take a multi-fold approach. Let me suggest one set of activities--by no means a complete list, but some ideas. We need more research on the service-manufacturing linkage to understand the transformation. That would be an excellent part of the "services sciences" agenda. We also need to find creative ways that the smaller supplier can move up the value-chain to take advantage of this shift. We then need to instill this notion of the fusion of manufacturing and services into the Manufacturing Extension Partnerships. The MEPs were on the front lines helping small and medium size companies during the quality revolution. They need to be on the front lines of the innovation and "customer solution" revolution.
Mr. Bloom has a big job ahead of him. His task is made that much harder by the transformative nature of the challenge. If it was simply a case of restarting the machinery, that would be hard enough. Instead, he has to finds ways to change the machinery around - while it is still running.
I wish him all the luck in the world. He will need it.
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