American factories, foreign lands: How can we keep our companies here?

Steve DaumNo one will claim that using statistical and monitoring software to stay competitive in the world will reverse the current trend toward manufacturing outsourcing to offshore operations.

But it could help.

A recent New York Times article reported on a challenge that President Obama had made to Apple head Steve Jobs last year, when Jobs hosted a dinner meeting for Silicon Valley luminaries.

Why couldn’t those jobs be brought home? Obama asked.

Lower cost of labor is only part of a more complicated story. Apple, and other manufacturers, need flexible and responsive partners that can, and are willing to, react quickly to changing demands. This more nimble and cooperative supply chain is a valuable asset–a competitive advantage for manufacturers.

“Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have outpaced their American counterparts,” the article asserted. Nearly all electronic goods are now produced in Asia or elsewhere.

If a workforce with appropriate skills is a driving force sending jobs to distant factories then improving American opportunities will require workforce training. Training for workers in statistical thinking, use of statistical tools, emphasis on customer-supplier relationships and shared understanding of quality requirements is an important aspect of this training. Statistical Process Control (SPC) and related quality improvement techniques help to eliminate waste and improve efficiency. These techniques also facilitate communication up and down the supply chain, using common, well-understood concepts.

Have you thought about this issue? What can we do to keep even more companies from taking their manufacturing facilities abroad?

Let me hear from you…

One thought on “American factories, foreign lands: How can we keep our companies here?

  1. Lots of things can be done to improve the results of manufacturing in the USA. First though we should realize the results for the USA are really pretty good.

    China’s results are exceptional but the USA has done well. Manufacturing jobs have decreased everywhere dramatically – the USA job losses (while current data is hard to get) are likely LESS than global manufacturing job losses.

    The biggest thing that could be done to improve the manufacturing situation in the USA is significant fixes to the health care system. The cost of support the broken USA system is enormous. The second is to have managers of our organizations understand current management concepts like lean manufacturing and Deming’s ideas.

    They would then understand the weaknesses in spreadsheet thinking that lead to seeing outsourcing to cheap countries as the solution to all problems. They would see the benefits of producing close to consumers (which also means in the case of some that manufacturing everything in the USA moving some production offshore – for offshore customers – may well make sense).

    Putting the focus on improving the processes the company uses instead of just looking for a cheaper way to do what they do increases the desirability of the USA. Currently (this will change) the USA has people better prepared to take on a leadership role in improvements. By valuing the brainpower of your employees the desirability of locating in the USA is increased. This is merely due to current practices around the globe, this advantage for the USA will change (Japan and Germany are very strong in this area as is much of Europe).

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