Thursday, February 16, 2012

US Manufacturing is Not Dead

That is the title of a recent article I read online from Forbes (Lara Hoffmans contributor).  The article goes on to state that obviously there has been a decrease in manufacturing that coincides with the economic conditions affecting all of us.  It also points out that US manufacturing is still out produces the rest of the global economy and that industrial production is percentage wise a smaller part of the total US economy than in other countries like China.

The real gem in the article and why it relates to Enterprise Resource Planning (ERP) systems, is the efficiency new enterprise solutions bring to companies willing to take a hard look at their current processes.  The article points out that while the jobs associated with manufacturing have fallen, output has actually increased. 

Rising manufacturing productivity means a smaller share of manufacturing employment.

This posting is not intended to be an economics lesson or complete in any other related aspect.  Far smarter people that I have done enough damage to the economy to last several lifetimes, you do not need my analysis. 

What I would like to suggest is that technology solutions have played an integral part in the productivity gains.  The gains alternate between better equipment, better software, better hardware, smarter workers, better management, all of which utilize these improvements, and the process repeats. 

Think how more efficient you are with your own online banking.  You used to get a service, receive a bill in the mail, write out a check, find a stamp, put everything in an envelope, mail it back to the supplier all while hoping the postal system did not have a bad day.  Now you sign on, select the bill to be paid, and click process.  Often this can be set to automatically function.  Please, no judgments of the detail listed here or how many steps are required.  It is obviously much easier and more efficient to process bills electronically today than the manual processing done in the past.

There have always been general improvements and milestone improvements to manufacturing order processing.  The driving forces of milestones are more memorable, but the process and processing have always been in place.  Recent milestones would include opening the Internet to business communities, Y2K preparedness, Dot-Com buildup and of course the recent economic setbacks.

After you squeeze the last bit of productivity out of some equipment, you start throwing people at the problem.  The problem might be a good one, like a new contract for your products.  Then you might try more equipment if it seems like the demand is not a one-time issue.  When this only has moderate effect positive or negative, you start to think more or better management is the solution.  Your organization becomes top heavy with too many layers of management and not enough people producing. 

Sometimes these actions might work for a while, but inevitably you start looking for new technology to drive new efficiencies in your operations.  Improvements in hardware enable affordable improvements in software (ERP solutions). 

Better integration of data processing and manufacturing processing tightens the loop. Say, for example, bar coding, RFID, or wireless communications.  These technologies increase productivity while at the same time reducing the manpower needed to capture and process the information.

You might say at this point that I have bar codes, I have wireless devices, I have implemented conveyors and automated my warehouse with voice picking.  I utilize shop floor data collection.  I capture transactions automatically. 

Maybe you have the pieces, but they do not play well together.  Sometimes it is not what you have, but how you use it.  Were all the parts designed and integrated for the way you are doing business now, today?  Or did you piecemeal the parts bolting them on as you grew. 

I get the picture of the Beverly Hillbillies car right about now.  It had a lot of functionality, got the family from here to there, but is that transportation as efficient as something more new?  After all the roads would support faster transportation, new tires are designed for modern roads, more efficient engines power more aero dynamic vehicles. 

The ERP solution you are using today is just like this example.  A trusted advisor like Dolvin Consulting can give you fresh eyes and perspective to look at your operations.  This does not mean you are doing anything wrong.  Sometimes you just need a fresh opinion.  Sometimes you are doing the best you can with the resources you have and you want to confirm that fact. 

It is rare that the people we talk with need what we have when we contact them or they are in need of a solution, but do not have the budget.  We understand.  We help to educate your team on their options and when the time is right, when you do have a challenge develop or you can allocate monies from your budget, we will be ready to help.  We leverage our knowledge and industry resources to help you achieve your goals. 

There is no one-size-fits-all solution nor is there a one-size-problem.  We are here to help, but you must contact us first.  Reach out today to find out what options you have.  Get a fresh perspective.  Both of our futures depend on it.

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