The world of manufacturing has reached a turning point. Buffeted by wave upon wave of change during the last quarter century, executives of manufacturing companies and those who advise them have redefined what it means to be a manufacturer and have developed strategies to compete under the new rules. To be sure, the catalysts of the ceaseless change -- the increasing globalization of business and the stunning advances in information technology -- have transformed every aspect of society as we know it. The very purpose of a company -- manufacturing or service -- has been turned on its ear. No longer content to be merely makers of products or providers of services, manufacturing executives now see their role more broadly, as creators of value and wealth.
For manufacturers, however, the changes have been particularly wrenching. Faced with predictions of their decline at nearly every turn, manufacturers have battled back, embracing new business rules and technologies, reinventing themselves, and re-emerging as leaders of the wealth-creating sector of society.
"Manufacturing is more exciting than ever," declares Stephen R. Rosenthal, director of the Center for Enterprise Leadership (CEL) and a professor of operations management at Boston University. "It's receiving brighter minds than ever and requires people to have more skills than ever."
It's not so much that the winds of change have ceased, but that leading companies have learned to capture their power and use it to propel growth and competitiveness.
No part of the manufacturing organization has been spared. From the factory floor to the boardroom and beyond, new ways of viewing and doing work have been implemented. Indeed, the manufacturing organization has branched out, adding to the manufacturing process its suppliers and customers. Perhaps most jarring is that each of these components of the manufacturing cycle has been integrated. No longer following a safe, slow, linear path from the R&D lab through each functional department, products are developed almost instantaneously with each group of experts contributing simultaneously.
For executive leaders, the New Manufacturing represents a complete overhaul of management and strategy. While competition attacks from every angle, executives can counter with a bewildering array of strategies and tactics. The sources of innovation are broader, says Ruben F. Mettler, retired CEO of TRW Inc., Cleveland. "If you look back to the '70s or '60s, the sources of innovation for a manufacturing operation were relatively few." Now, he says, companies can "innovate to improve their productivity and competitive position by using all the resources that they can put their hands on: not just a good distribution system, not just a good engineering department, [but] the bringing together in an innovative way the potential sources of innovation."
Is it a Revolution?
With the pace of change accelerating, revolutions in business management are declared with such frequency that most executives have become inured to them. Whether this turning point -- the New Manufacturing era -- is revolutionary is for the historians to decide. The last quarter century does, however, seem to be different from the other so-called watershed moments in two ways. First, the drivers forcing the new definition -- globalization and information technology -- go beyond manufacturing, beyond business in general, and penetrate into every corner of society much like the Industrial Revolution imposed massive changes on society.
Second, so many consultants, consortiums, and theorists seem to be agreeing for a change. Discussions of a broad-based, fundamentally different theory of manufacturing management have appeared in research studies during the last two years. Among them:
- An industry-driven collaboration led by The Agility Forum, Leaders for Manufacturing, and Technologies Enabling Agile Manufacturing last January published the "Next-Generation Manufacturing Project" report.
- Ernst & Young LLP, New York, will publish its "Connected Manufacturing Enterprise" early next year after a year-long investigation involving a panel of experts from industry and academia.
- TBM Consulting Group, Durham, N.C., last fall held its "First Annual Blue Ribbon Panel on Global Manufacturing." Made up of manufacturing leaders from around the world, the gathering "was to help define the future imperatives for manufacturing success in the 21st century."
Many strategies identified by these organizations and IndustryWeek as part of the New Manufacturing are not new -- the value of teams, partnerships and alliances, and an empowered workforce is well known. What is new is that we are reviewing the best-practice strategies developed during the last 25 years and identifying the fundamental underlying principles of successful manufacturing management.