U.S. Manufacturing is Dead…Long Live U.S. Manufacturing
So many news stories about U.S. manufacturing over the past couple of years have focused on declining employment, factory closings, and off-shoring to China. In fact there’s been quite a bit of talk lately about punishing American companies that move jobs overseas (see post on Falling Taxes…Except Here from the guys at Evolving Excellence). Clearly the message is strong: U.S. Manufacturing Strength is nearing an end.
In the Institute of Industrial Engineers 2008 Industry Predictions, Humantech CEO Franz Schneider stated "our client group is returning to basic IE practices, abeit wrapped in the guise of lean. Implementing standardized work, progressive workstation ergonomics and minimizing work area clutter through one-piece pull are aspects of the 1970s that in 2008 combine with employee engagement to produce an efficient, agile, manufacturing environment."
This seems like a contradiction – U.S. producers are working hard to become more effective, in the face of a domestic manufacturing landscape that is quickly dying, surrounded by competitors that find best practice is to offshore?
Maybe the answer is that manufacturing in the U.S. is actually thriving. A recent article in Kiplinger’s Personal Finance points out that "…not only is manufacturing alive and well, but U.S. factory workers are also producing — and exporting — record amounts, both in quantitiy and in dollar value." It goes on to describe the U.S. as a world leader in productivity, and says that the U.S. is selling record amounts of goods overseas. The reason that there is widespread belief that U.S. manufacturing strength is declining is a consequence of improving productivity – fewer people are needed to produce an ever increasing amount of output, so manufacturing employment is declining. But U.S. manufacturing might is definitely on the increase.
Furthermore, at the Society of Manufacturing Engineers 2007 Great Lakes Conference, Michael Hetzel of Pro QC International revealed that China is not the "world’s manufacturing floor" as many have suggested – the U.S. is still way out in front with 20% of the world’s manufacturing capacity and that while China’s economy is growing strongly, the U.S.’s real GDP growth is still more than China’s. That’s right – the U.S. economy is growing faster than China’s in real numbers.
Perhaps U.S. manufacturing is not imploding, as many would want us to believe, but transitioning to a new age of effectiveness. If so, those manufacturers who are working hard at improving safety, quality, and productivity will be the ones to lead the way.