Interesting piece by Mike Buetow over at Hot Wires. Sounds like China's beginning to taste the sweet nectar of letting corporations take care of their people instead of the government taking care of the people. There's apparently a new round of fees levied by China on MNCs doing business in China. Apparently this has caused hundreds of businesses to go under already with thousands more poised to go under as well.
Don't you just love having your manufacturing operation in the Wild Wild East. Now believe me, I personally feel that globalization in the long run is a good thing. It will be beneficial for humanity as a whole. But at the end of the day, if you're trying to find a good supplier to make your product or sub-assemblies, do you really want to have to think about and manage these types of things? You are in the states, your customers are in the states, why not have your products manufactured in the states. Deal with an operation that's easy to get along with and speakers your language, both figuratively and literally. It's not anti-globalization, it's just good business.
Why we left our factories in China Here's a feel good story for your weekend. Sleek Audio, maker of customizable earphones, recently moved most of their manufacturing back to the United States from China. I like the phrase they use "reshoring". Fortune has the article so click the link to learn more.
I'm seeing more and more of this. OEM's are getting fed up with the hassles of dealing with a factory many many miles away. Even with the flattening of the world, it's still difficult for a relatively small company to manage their manufacturing operation when they are so far away. And even then, who are you dealing with at your contract manufacturer. Probably the fabled "account manager", who speaks the English language, but doesn't communicate all that well, and can't even get you answers because the rest of the group won't be in until 2AM your time. Give me a break!
We need next generation manufacturers. Companies that will step up and compete and offer you real service. When you call Worthington Assembly, you get Neil Scanlon, the company's president. Something tells me your "account manager" won't be able to help you quite as well.
What's Happening to U.S. Manufacturing Interesting article by Michele Nash on The Huffington Post. It's well written and has some rather depressing statistics about American manufacturing. But I wish she had spent more time speaking about what to do about it.
Honestly, it's not easy. There's not a very good answer. And I suspect it would take many good answers to fix the very real issues American faces in the manufacturing sector.
I think a return to boutique manufacturing is probably one of the better answers. What do I mean by boutique manufacturing? Basically, take our friend the blacksmith as an example. He did not have huge volumes of product that he pushed out constantly. He was a craftsman. He was careful about what he produced and what he produced was often of the highest quality, but it took him a long time. Now mix his craftsman style with yesteryears high volume manufacturers, and you get something like us. A boutique manufacturer or a "Next Generation Manufacturer" as we like to call ourselves. We're available, local, competitive, and interested in making a piece of jewelry, so to speak, with everything we ship. We will do this with great skill and care like a blacksmith, but with high efficiency and speed like a volume manufacturer, by utilizing modern robotics. Many of these modern robotic pieces of equipment would never have been possible to build in the era that all of the big companies were moving their manufacturing offshore. Had they stuck it out for 5-10 years, I think we might be seeing a very different manufacturing sector today. But I digress...
We're manufacturing, and we're growing. We're staying here in the US. Our interest is in providing jobs for people and showing these big guys that it can be done. They just have to try and not make lame excuses for why they want to outsource.
Defining Quality How can you make something more perfect? What if Apple said "You know what would make the iPhone more perfect? A stylus!"
Truth is, there is an international standards body that defines product build quality. In our industry it's called the IPC. They have 3 classes of product build quality. Class 3 being the highest. WAi pretty much doesn't ship anything under Class 3. We guarantee our work to Class 2, but really nearly everything we ship exceeds Class 3 specs. So what's going to differentiate us to our customers? That's the secret sauce.
We can ship Class 3 product to our customers every day. But if we're shipping 3 weeks late, do you think our customers will be pleased? We can ship Class 3 product but if they're packaged in non-ESD safe materials, do you think our customers will be pleased? We can ship Class 3 product but if we never answered the phone, do you think our customers would be pleased?
It's much easier to measure product build quality, but at the end of the day, that's not a very good definition of quality.
We've Become a Nation of Takers, Not Makers Great piece by Stephen Moore of The Wall Street Journal. He brings up some amazing statistics about the number of people working for the United States government compared to manufacturing workers. In fact he even goes so far as to show that there are more people working for the government than work for manufacturing, fishing, mining, farming, utilities, forestry and construction... combined!
Here's a choice quote
When 23-year-olds aren't willing to take career risks, we have a real problem on our hands. Sadly, we could end up with a generation of Americans who want to work at the Department of Motor Vehicles.
Is a return to 'Made in the USA' Possible? Eric has some interesting thoughts here. He lays out the challenges that could get in the way of American manufacturing becoming prolific again. He misses a couple points but this one stood out the most for me.
Electronics component supply base: Houston, we have a problem...
Oh yeah. We have a problem. He points out that China controls 80% of the supply chain. That's why often times it may seem so much less expensive to manufacture in China, because they have all of the parts. But we're finding that there are much higher costs to OEM's that never get weighed evenly. Risk!
http://www.c-spanvideo.org/program/MeetingClo Thomas Friedman, 3 time Pulitzer Prize winning journalist, spoke at the recent National Governors Association Annual Meeting in Salt Lake City. His book The World Is Flat is required reading. Amazon link: The World Is Flat 3.0: A Brief History of the Twenty-first CenturyInternational Relations Books)
He makes a lot of points and the video of his speech is an absolute must watch. But I'm going to focus on one of his points. We need to be better.
It's not good enough to just show up anymore. You cannot continue to remain average. Average businesses, average non-profits, average employees. You need to be above average. You're not competing with the company in the next town that does the same thing you do. You're competing with the company in China, in India, in Indonesia, that does the same thing you do. And we feel that here very strongly. For goodness sake, we're an electronics manufacturer. Ever heard of Foxconn before? Yeah that Foxconn. The one that employs nearly 1,000,000 workers and provides manufacturing services for Apple, Dell, HP, just about any consumer electronics companies you can imagine. 20 years ago, if you wanted to have a circuit board manufactured, it wasn't very easy. You either had to do it yourself, which takes a huge capital investment, or hire a contract manufacturer. And how did you find them? A business listing in your local area. How about today? How would you find a contract manufacturer today? Google. You'd type in "contract manufacturer" and get 2.52 million results. Worthington Assembly is one tiny little itsy bitsy result in all of those 2.52 million results. So no, we cannot be average anymore.
What exactly does that take? Creativity. We employee extremely creative people. They might just not realize it yet. Or maybe we've done a poor job of letting their creativity blossom. As we've learned from the Mass MEP, we need to empower our workforce. Allow them to be creative and come up with the best ideas that we could never think of on our own.
We're not sitting down. We are not standing by idly or waiting for Washington to fix our problems. We're taking action and making a difference. We are going to have an impact. We are going to show people how it's done.
WAi is well on their way to becoming ISO 9001: 2008 registered. We had a visit today from our consultant (who is awesome by the way) and he helped push us over the edge to really get the ball rolling. We even conducted our first audit and filled out our Management Review minutes. We're well on our way. ISO is going to be a great help to us. It will ensure that we're providing our customers a quality product, on time, at a competitive price. This is something we've always done but now we have an international standards body proving that we are indeed providing such a service. We know this will help grow our business, make our current customers more comfortable, and open up a door for future customers.
Put your name on it This is something we fully plan on doing here at WAi. It's not that we don't already work as hard as we can. But having our name on our products, our own personal name, it will really show our customers that we're serious about delivering a quality product.
Give and Get Seth is a master at explaining things clearly. I agree with him fully. It's the age old saying "There is more happiness in giving than there is in receiving." In the business sense, empowering your employees and giving them the tools they need to be successful will be far more rewarding than doing the exact same thing but with your top down direction.
For example, say you have options A, B, and C. If your employees come up with B as being the best option on their own, they will work that much harder at making sure option B works because they've invested into it. Whereas, if you realized on your own that option B is the best option, and then dictate to your employees, you will not be as successful as when your employees come up with the answer on their own.
People will make the wrong decisions sometimes. But things don't have to be permanent. If your employees chose option C, they will likely realize that was the wrong option and reevaluate, especially with good management and direction, which you're working hard at, right?
What makes Apple really, really different Interesting take on what makes Apple really different from their competitors. But what I find most interesting about Ken's article is that he points to having morals as what makes them really different. He's not saying that Apple has "good" morals or "bad" morals, in the theocratic sense, he's saying they have morals, or standards if you will, that they operate by. And these morals build brand loyalty. It's a great read and worth thinking about when it comes to the decisions we all make in business.
What a company. [youtube http://www.youtube.com/watch?v=39jtNUGgmd4&w=560&h=349]
http://daringfireball.net/linked/2011/06/14/johnson-penney Now this takes guts. Take on the job as CEO of a decades old corporation and then on day one invest 50 million of your own dollars into the stock of your new company, without the option of selling it for at least six years.
You want to send a message to your investors? You want to send a message to your corporate team? You want to send a message to your employees? This is one hell of a way to send a message. And I think it's loud and clear. "I am all in. And I know it's going to be worth it. So should you"
Seth hits the nail on the head, as usual. When all you worry about is getting financed, what incentive do you have to make a good product or service and take care of your customers? My favorite quote from the article:
I don't care so much how much money you raised, or who you raised it from. I care a lot about who your customers are and why (or if) they're happy.
This will be an ongoing series of successful lean manufacturing stories, articles, interviews, etc, where domestic manufacturers have implemented lean manufacturing techniques and have been rewarded for their effort. Follow the link below to learn how Vermont Castings won business back from China. My favorite quote from the article
On his first day as the company’s new general manager, Howe noted, he was approached by an employee, who told him, “I have this idea to shorten the time it takes for this job.”
The result, according to Howe, turned an eight-hour process into a 25-minute one.