In a crisis, it’s natural for people to take a defensive stance. In the current economic situation (September 2009), for example, many shop owners have focused solely on buckling down, limiting expenditures to the bare necessities and waiting for things to get better. Unfortunately, these defensive strategies may not be a long-term formula for success. When the rebound comes, it will likely pass by many of the shops that fail to evolve in the meantime.
There are reasons to be optimistic about the future of American manufacturing. A sharp rebound is expected by many top managers at businesses throughout the country. For multiple reasons, ranging from currency exchange rates to automation to hyper-lean initiatives, the commonly cited advantages of offshore production carry less weight than they have in recent years. Many companies are beginning to eye domestic manufacturing as a potential strategic advantage. In the near future, opportunities will abound for American manufacturers that have positioned themselves to respond.
Outside of the continuing low levels of demand in many industries, the biggest issue facing American manufacturers is uncertainty about when things will change. A recovery is inevitable, but will it be three months, nine months or two years down the road? While I tend to favor the shorter possibility, there is no definitive answer. Given high levels of uncertainty, what actions can shops take in the meantime to maximize their competitive advantage without taking excessive risks? One can think of the best current strategy in terms of R3: refocus, rediscover and reinvent.
With low demand across nearly the whole economy, many shops currently have excess time on their hands. Refocus refers to using that time to contemplate current and future trends and determine the general steps needed to capitalize upon them. When the economy recovers, manufacturing will have changed substantially. Pressure will build to maintain low inventory levels, resulting in a much greater need for on-demand production systems. The need to keep inventory low will speed the trend of more complex part designs that reduce the number of components in a finished product. This will accelerate a "done in one" style of manufacturing in which multitasking or even ultratasking machines make complete parts in a single setup.
The economy’s effects on overall processes and systems will vary by industry. Some changes will be drastic and others will be subtle, but all will change to some degree. Shop owners are well- advised to consider the potential impact of the economy in the areas they serve and examine the implications for their operations.
The rate of technological change has increased substantially in recent years and will continue to do so, due to constant innovation from providers of machine tools, cutting tools or other manufacturing equipment. The concept of "rediscover" calls out a shop’s opportunity to use any spare time to learn about new technologies and how to implement them for maximum benefit.
The time is ripe to learn. Machine tool builders, cutting tool manufacturers, accessory manufacturers, software developers and providers of other technologies are joining forces to develop products that complement each other in an exceptionally integrated fashion. Across the country, these same companies are hosting joint seminars where shop owners and machine operators can gain a better understanding of these developments. Taking full advantage of the economic rebound will require an understanding of the newest methods for improving productivity and efficiency.
The need to reinvent is also closely related to leaps forward in manufacturing technology. Constant innovation means that there is almost always a better way of doing something, even for highly efficient processes. Depending on the application, process redesign can make the difference between mere survival and success. In most instances, suppliers will gladly evaluate a shop’s current processes and identify key areas of potential improvement. Shops with the time to participate in such programs owe it to themselves to do so.
Another aspect of reinvention obviously involves making investments in technologies that enable new processes. For shops with a healthy cash supply or available credit, it is an excellent time to purchase the equipment to refine operations. Others may identify a need, but they lack the funds to overhaul their equipment. That does not mean that process improvement should not be thoroughly explored and examined. If a manufacturer has enough cash to make an initial investment in a new process, it would be highly advisable to do so. Even if only one production line or cell is updated, the shop can become familiar with new methods and be ready to complete the transition when times improve. If even a limited investment is impossible, a shop is still well-advised to examine its processes and develop a plan for updating them as soon as conditions improve.
While the current economy is certainly nothing any manufacturer wants to face, there are solid steps that can be taken to emerge from it even stronger. Those shops that take the time to refocus, rediscover and reinvent may find themselves with a larger competitive advantage than they previously enjoyed.