The sizzle-or-fizzle debate over U.S. manufacturing is laid out by an article in the June 2 Wall Street Journal. Its author, James Hagerty, weighs the arguments from Tigger types (Competitive costs! Proximity to customers! The political climate!) against rebuttals from industry Eeyores (Rusty skillsets. Distant consumer markets. The political climate).
Some of this debate is predicated on the assumption that the manufacturing we bring back is going to look a lot like the manufacturing we sent away--only with robots. But the ways we work, the things we make, and the ways we think about working and making have all changed dramatically in the last few decades. Those shifts suggest potential new models for a resurgent manufacturing industry. The following ideas either already exist in limited practice, or are well worth considering.
While debates about manufacturing typically concern mass production based on economies of scale, there’s less mass to our markets than there once was. At the same time, predictions that we’ll soon be fabricating everything from lawn mowers to sanitary pads on our home 3-D printers seem far-fetched. In an article on Forbes.com last year, venture capitalist Randy Komisar used the term “artisanal manufacturing,” to describe a model somewhere in-between.
According to Komisar, artisanal manufacturers prioritize quality over quantity; scale cautiously based on demand; draw on the wisdom of skilled workers; and deploy technology as an optimizing scalpel rather than a commoditizing bludgeon. Examples he cited include American Giant (apparel), Heath Ceramics (home goods), and Sierra Nevada (beverages). Artisanal makers of bicycles, musical instruments, footwear, foodstuffs, and furniture are also sprouting.
Micro-factories can help artisanal manufacturers carry out their high-quality, high-touch, low-volume mandate. They can also apply elements of this approach to such bulging-muscles endeavors as building cars and major appliances. The Henry Ford of this movement is Jay Rogers, founder of one of this country’s most fascinating companies, Local Motors. Rogers may bristle at the Ford comparison: there’s nary an assembly line to be found at his three diminutive plants, located in Phoenix, Las Vegas, and Knoxville, Tennessee. (The company hopes to open 100 micro-factories around the globe in ten years.) Instead of heavy machinery and conveyor belts, Local Motors uses smaller tools and prototype-friendly equipment--including 3-D printers--to produce limited-edition vehicles based on crowd-sourced designs, in workspaces that are reconfigurable at the drop of a wrench.
“I don’t believe in mass customization, Rogers told me earlier this year. “I believe in an economy of scope. The more capability we have to do different things at a low volume, the better off our consumers. We effectively are feeding consumer desire for rapid technology adoption and rapid change.”
If this sounds like the stuff of niches rather than riches, consider that General Electric is building its first micro-factory--for major appliances--in a partnership with Local Motors.
Manufacturing never deserted the United States. There remain thousands of small contract manufacturers--largely family- or entrepreneur-run--with deep expertise in many industries. But one little factory can’t supply the needs of large corporate customers, particularly vertically integrated ones. Perhaps it’s time to bring back the rollup.
In rollups, private-equity firms or other investors buy multiple small players and merge them, providing shared resources and--for customers--a single point of access. Rolling up small contract firms would let corporate customers find local manufacturers with consistent services and quality both here and in multiple global markets. And the companies themselves would have more money to invest in infrastructure such as new technology. They could also source parts or capabilities they lacked from sibling companies.
The Journal’s glass-half-empty perspective cites workers with atrophied skills and students’ blush-worthy math and science scores as reasons U.S. manufacturing can’t get up to speed quickly. To expedite the re-skilling of America, we might try adopting German apprenticeship programs. In Germany (and elsewhere in Europe) students spend part of their week in vocational-school classrooms where they learn the foundations of various skills and industries. The rest of the week they spend working in local factories, mastering the specifics of those businesses’ machinery and processes. The employer and the school decide jointly what each should be teaching. After graduation, most students are hired at the companies where they apprenticed.
Lean manufacturing predates lean startups by more than two decades. But Silicon Valley may now be poised to play sensei to manufacturing’s Grasshopper, and help U.S. industry become more nimble and innovative.
“Made in the USA” is an effective marketing claim internationally as well as domestically. The more companies proving out our reputation for quality--and perhaps collaborating to propagate it abroad--the better.
So, yes, we should ask what the future holds for U.S. manufacturing. But we should also ask: “What do we mean by manufacturing?”