How to save the manufacturing sector
Like most industries, the manufacturing sector is transforming rapidly. Because of recent technological advances and globalization, U.S. manufacturing is facing intense international competition, increasing market volatility and complexity, a declining workforce, and a host of other challenges. Yet we know that in order to have a strong economy, we need a strong manufacturing base. So what’s the answer?
Today’s manufacturers must transform along with the rest of the world by adopting six advanced Next Generation Manufacturing principles. They are:
1. Anticipate customer needs: Look at your customers’ future and focus on what you do know rather than what you don’t know. Ask, “What are the hard trends, the things that will happen, versus the things that might happen? What are the industries that are converging around our customers that our customers currently don’t see?” Then you can start seeing both needs and opportunities before they happen.
2. Innovate around the core: What are your core competencies? Are you still using your core competencies? In the past, manufacturers could go decades between innovations. That strategy doesn’t work anymore.
Today you cannot just innovate now and then: To survive and thrive in a time of vertical change, you have to be innovating around your core competencies continuously. So what is your core, and are you using it?
3. Focus on collaboration: Collaboration is much different than cooperation. Cooperation is based on scarcity and it contains within it the assumption that your interests and mine are inherently in conflict; however, we will temporarily set aside those cross-purposes to find some cautious tactical common ground. In contrast, collaboration is when we co-create the future together. It’s about working with everyone else, even your competitors, to make a bigger pie for all. It’s based on abundance and requires working together under higher levels of trust and connectivity.
4. Pre-solve problems: The best way to avoid problems is to predict and pre-solve them. How? Use hard trends to look into the visible future and ask, “What are the problems that we can see based on anticipating customer needs?” Get that down to a short list that’s aligned with your core competencies. Then that’s where you focus because you can see which problems are coming. Additionally, look at your own company in the same manner to determine the problems you’re about to face. Solve them before they happen so they don’t occur in the midst of rapid change and transformation. That’s the only way to stay ahead of the curve.
5. Inform and communicate: Informing is one-way. It’s static and doesn’t always cause action. Communicating is two-way. It’s dynamic and usually causes action. Social media is a good example of engagement in communication, which is why it’s spreading so rapidly and becoming a business tool. Next generation manufacturers understand that you don’t just inform; you also communicate, develop that strategy, and move it out internally as well as externally.
6. Do continuous de-commoditization: The minute you come up with something new, a competitor will copy it. As they do so, your innovative product or service slowly becomes a commodity. The margins get thinner as time goes on. But instead of letting the margins get thinner and riding them down, you can wrap a service around a product or wrap a service around a service to add new value. You can think creatively about your product or service so you can repackage it, redefine it, revamp it, or somehow make it unique in the marketplace again. When you do continuous de-commoditization, you’ll find yourself with good margins and a growing business.
In a competitive global economy that is becoming more tightly connected every day, U.S. manfacturers can no longer do things the way they've always been done. Adopting these next generation manufacturing principles is the only way to obtain the talents, capabilities, and resources necessary to build a highly effective enterprise that thrives in a global marketplace.
Daniel Burrus, one of the world's leading technology forecasters, business strategists, and author of several books
Copyright 2012. Author retains copyright. All Rights Reserved.
