When I first arrived at IndustryWeek in 1995, the publisher at the time referred to manufacturers as the economy's "value creators." As a relatively young journalist, this sounded suspiciously like the marketer-speak I had been taught to avoid.
It didn't take long for me to learn, however: IndustryWeek viewed "manufacturing" differently than most people. We didn't use "manufacturing" as a synonym for "production." We used it to talk about a particular type of business, one that made tangible goods as part of its, ahem, "value proposition."
The phrase was used to differentiate "manufacturing," the process, from "manufacturing," the business. Indeed, one of my first tasks was to lead a project to organize editorial coverage so that every aspect of a manufacturing business could be covered, from research and product development through to delivery and aftermarket service -- including production, finance, marketing and sales, technology, workforce, supply chain, and leadership and management strategies.
As well, in the late '90s and beginning of the next decade, the editorial team published a yearly survey about the manufacturing "Value Chain," seeking to identify the trends, strategies and best practices that work best when companies strategically combine excellence across these disciplines for competitive advantage.
Recognizing the early outsourcing trend, we paid particular attention to how manufacturers worked with suppliers and customers, which we dubbed the "Extended Value Chain." Throughout, we also covered how manufacturers expanded their offerings to include services (to provide "business solutions," not just products), and leveraged (then new) digital technologies -- software, the Internet, etc.
Fast-forward to today, and this value-chain idea is gaining increased attention among public policy leaders.
In early March, the National Academy of Engineering published "Making Value for America: Embracing the Future of Manufacturing, Technology, and Work," which found: "Manufacturing or 'making things' can no longer be considered separate from the value chain, the system of research and development, product design, software development and integration, and lifecycle service activities performed to deliver a valuable product or service to market. Businesses are focusing on this entire system to ensure that they are 'making value' for their customers and are less likely to be disrupted by competitors or new technologies."
Manufacturing or "making things" can no longer be considered separate from the value chain …
— National Academy of Engineering
Also in March, the Brookings Institution weighed in with a report that revealed the implications of extending the value-chain perspective to the nation's employment statistics. The team reconstructed existing labor data "to approximate what would be the adequate accounting of the entire manufacturing value chain," including those who do the pre- and post-production work for manufacturers, but who are not counted as manufacturing workers in the nation's employment statistics.
The conclusions of these reports are too extensive to report here. However, among other things, they've done nothing less than discover the nation's hidden manufacturing workforce. In doing so, they've touched on explanations of why manufacturing is so important to the nation's economy and why young people may not consider pursuing a job in manufacturing, as well as extended the scope of what it means to "make things."
Most important, they've provided more proof that manufacturing hasn't been shrinking or dying as some have declared, but rather that it is continuing a transformation that is only now beginning to be understood.
IndustryWeek applauds the work these researchers have done to highlight the manufacturing value chain. Adapting this new, more accurate appraisal of manufacturing will lead to more effective manufacturing public policy.