We often push the fact that manufacturing is expanding in the U.S. and it really is possible to compete globally from U.S. factories… even in low margin industries. Alas, it seems we aren’t being heard. Perhaps Jim Womack will have better luck.
What do Sens. John McCain, R-Ariz., and Barack Obama,
D-Ill., their parties’ presumptive nominees for president, have to
learn from a factory that produces a million toothbrushes a day? A lot,
and it has nothing to do with teeth care. It’s about the potential for
manufacturing in America instead of China.
U.S. manufacturing is far from dead. Production and exports are up.
And U.S.-based factories are finding ways to compete with China through
lean production, a management revolution that can transform American
"Contrary to what we have come to believe," said James Womack,
chairman of the Lean Enterprise Institute, a Cambridge, Mass.,
educational institution, "we are the world’s largest manufacturer and
will continue to be because of a combination of the dollar going down
and rising transport costs."
Manufacturing output has increased 11 percent in the last year. U.S. exports of manufactured goods are also up over 12 percent.
Moreover, U.S. manufacturers consider the United States the most
desirable country for expansion of their businesses over the next three
years, according to a recent survey of 321 North American manufacturing
executives released in mid-June by the National Association of
Manufacturers, The Manufacturing Institute, the Canadian Manufacturers
and Exporters and Deloitte Touche Tohmatsu. And 57 percent of U.S.
manufacturers predicted they will become more globally competitive over
the next five years.
So what are the political implications.
Voters don’t need McCain and Obama to throw in the towel on
manufacturing. They need vision. They need to hear the candidates
challenge American industry to make the changes necessary to insure
their competitiveness for years to come.
The bad news is this won’t be easy, because neither management nor
labor is inclined to change. The good news is a renewal of American
manufacturing will not require major new government programs.
But it will require the next president to believe that manufacturing
in the United States has a future. And he will need to be willing to
use the bully pulpit of the White House to challenge American
manufacturers to take advantage of the window of opportunity over the
next few years to become lean producers and to commit themselves to
constant improvement over time.
It’s a worthy goal. One candidates McCain and Obama should embrace.
Oral-B’s toothbrush factory is a perfect case in point. Instead of chasing low labor costs overseas, they buckled down and looked inward.
Manufacturing toothbrushes would seem to be one of those activities
that should have migrated long ago to low-wage locations in Mexico or
China. And, at the beginning of the decade, Gillette, Oral-B’s parent company, was considering just such a move.
But, this week, Oral-B celebrated 50 years of doing business in the
American heartland, thanks to lean manufacturing. The company was able
to keep its operations in the United States by rigorously attacking its
total costs: not just the cost of production, but the cost of
inventory, low quality and transportation. It cut waste at every opportunity through reducing inventory,
scheduling just-in-time delivery of parts and, most important, through
a management and labor commitment to constant improvement of the
The results were telling. From 2001 to 2004 costs were reduced 18
percent and productivity improved by 55 percent. Employment was also
cut by 38 percent. But most jobs were saved because production stayed
If they can do it in a low margin industry, anyone in a higher margin industry like tech should be embarassed to even think about moving overseas, unless it is to be closer to their customer. We don’t need new government programs; we just need leaders with vision who can see past popular perception and deal with facts.