The major effect of the Sloan management system on America, and much of the rest of the world, was the demise of the manufacturing companies. General Electric, General Motors, NCR and the rest all began as manufacturing companies that had sales and accounting functions. After Sloan, they all became marketing and finance companies that happened to do some manufacturing. When it is more expeditious, they are all willing to sell off or outsource manufacturing. Marketing and finance, however, will never be outsourced because those are "strategic’ and ‘core competencies’.
The most nonsensical business theory to spring from this concept of business is "Brand Management". What "Brand management" too often means, in the end, is creating the illusion of value for the purpose of duping customers into paying more than a product is actually worth. The business theory boils often down to the idea that creating the right image can mislead some ignorant consumer into paying $2 for Brand A, instead of $1 for Brand B even though they are pretty much the same. It assumes that customers are not sharp enough to see past the illusion and discern value.
Levi Strauss went down the Brand Management path, peddling a couple of yards of denim and a handful of rivets for $50 by duping folks into thinking their denim and rivets were much more valuable than someone else’s. Walmart hung ’em on a rack next to a couple of yards of denim and a handful of rivets called Faded Glory, priced at about $15. It did not take long until Levi was no longer a manufacturer. They import 100% from Asia because the customers were not quite as dense as the Brand Managers assumed and they are struggling to get their cost and price closer to the real value of the product.
Will Rogers said, "If advertisers spent the same amount of money on improving their products as they do on advertising then they wouldn’t have to advertise them." He got that right, and the business world proves that point every day. The problem is that delivering value is a function of engineering and manufacturing and the Sloanistas have written those functions off as the sort of things that might just as well be done in India or China since they are not really strategic – like marketing is. Unfortunately, the old saying, "Fool me once, shame on you; fool me twice, shame on me" has merit. Teenagers are easily conned by the brand management scams, but adults usually will fall for clever advertising once – then the product has to stand on its own merits.
All of this is a long-winded preamble to bidding a fond farewell to APICS. For 40 years, APICS has been a powerful, positive force for manufacturing improvement. However, the last decade or so has seen their steady decline in relevance to the point that their contribution to lean manufacturing is insignificant. Once the first stop for leading manufacturing resources, they are now an afterthought. I personally hate to see it happen. I first joined APICS a quarter of a century ago; I’m APICS certified; my career was greatly enhanced by the knowledge I gained through APICS, and some of the best personal and professional relationships I have formed began at APICS meetings and conferences.
In my quest to try to understand how such an important organization could fade away, I stumbled across this on their web site: "APICS will eliminate the tag line ‘the educational society for resource management,’ and will develop new tag lines based on further consideration of how best to promote the APICS brand." That said it all. I needed to look no further. It is clear that APICS has missed the paradigm shift, and as its product deteriorates in value, they are trying to prop it up with the illusion of relevance. "Tag lines"? The "APICS brand"? Manufacturing people are not that stupid and APICS kids themselves by thinking that we will return to them as a result of their tag lines and brand positioning.
The psychology of the paradigm shift was a big thing in management a few years back. For those too young to have caught the wave, a paradigm is a model or set of accepted rules about how things are. When something comes along to reset the rules, it can be hard to accept the change. The example often cited was in wristwatch technology. In your grandfather’s day, the paragon of timekeeping perfection was the Swiss watch, and they were intricate mechanical marvels and pretty accurate. When the quartz crystal came long, however, watches could be made much cheaper, smaller and with substantially better accuracy. The Swiss rejected the new technology, stubbornly clinging to the rules of watchmaking that had served them for centuries. In the end, watch making all but went out of Switzerland and the industry died. The irony was that the creator of quartz crystal time keeping technology was Swiss, but his own country had no use for the radical change he was suggesting. The moral of the story is that the Swiss had made the mistake of defining their product by the technology deployed, rather than the functional application that gave it value in the eyes of their customers. They believed they were in the mechanical watch business, rather than the broader time keeping business.
APICS has fallen into the same deep hole. While they bill themselves as"The Association For Operations Management", in fact, they are still centered on MRP. As manufacturing becomes leaner, MRP becomes less significant, and often harmful. APICS has not been able to see that their MRP-centered product is steadily losing value in the eyes of their customers. Repackaging it, relabeling it and redefining the "APICS brand" will not make MRP more relevant.
The psychological barrier to the paradigm shift is the resulting devaluation of knowledge and experience. Those old Swiss watchmakers refused to accept new technology because the day mechanical watches were replaced with quartz crystal was the day all of their accumulated skills went out the window. The grizzled old master watch craftsman was no more more skilled in quartz crystal than the apprentice. Tossing out a lifetime worth of knowledge is hard to do, and APICS is suffering from it.
The blog posts that get the most emotional, negative responses are those that dismiss MRP as unimportant. The chapter in Rebirth of American Industry that brings out the greatest reaction – pro and con – is the one entitled "The Illusion of MRP". The old APICS guys come out of the woodwork to vehemently defend their technology. Asking APICS to accept the fact that the 1971 "MRP Crusade" is over, that it needs to be tossed out entirely, and that APICS must redefine its core through lean principles, with no MRP bias at all, is akin to asking the Swiss watchmakers to dump all of their tools in the river and start fresh. It is the right thing to do – it is the necessary thing to do – but it is probably expecting too much. It’s too bad because APICS has the infrastructure and the track record to pull the lean body of knowledge together and disseminate it in an objective, thorough manner – but it does not look like it is going to happen.