Rounding Up Again

by BILL WADDELL

Software Advice

A guy named Derek Singleton over at Software Advice interviewed me the other day for a piece he wrote about the state of manufacturing software, and what it takes to support lean. I don't agree with everything he wrote, but he put together a thought provoking piece. You might want to give it a read. YOU CAN FIND IT HERE

Once Upon A Car

I just finished reading "Once Upon A Car" by Bill Vlasic – a fascinating insight into the last years inside GM, Ford and Chrysler before the bankruptcies. The story of GM was one of an executive group in an insular culture of of self-importance, denial of reality, and an obsession with finance and labor negotiations. If the realities of how cars were made, how they create value, or why Toyota was beating them with a superior value proposition ever crossed the executive groups minds they never showed it. Management decisions made by bureaucratic committees, an irrelevant board and a complete lack of leadership prevailed at GM.

Chrysler was dead before it all began – Daimler knew it and unloaded it on investment bankers, clueless and uninterested in manufacturing, while the unloading was good. Fiat wanted it as a pipeline into the US market, and was smart enough to wait until they could get it in bankruptcy for a song … and Bob Nardelli of GE and Home Depot fame was out of touch with both products and production and in way over his head from the start.

Only Ford had real leadership in the form of Alan Mullaly. He largely ignored the deal making and financial machinations, and radically changed the Ford culture with a tunnel vision on products, core principles and the architecture of the supply chain. In short, he was the only leader in Detroit who put the highest priority on how the company actually made cars and made money, while the rest fiddled with deals and finance. No wonder Ford came out the big winner.

I highly recommend the book. Vlasic is a great writer, the book is rich in details, and it is an easy, intriguing read.

The Miracle Unraveling

I haven't written much about China lately because its all been said. Two years ago I wrote, "Add it all up and China's days as a low labor country are rapidly winding down. This should come as no big surprise. As I have often written, no country can build a long range economy on the principle of low labor costs." One year ago I wrote, "The house of cards that is the 'Chinese miracle', so widely admired by American and European academics and financiers is collapsing all around." And earlier this year I wrote, "China is left with an economy built on an increasingly fed-up labor force that has been misused and abused, inflation that is on the verge of spinning out of control, rising costs (Chinese products are up 5-10% just in the last six months and will go up further and faster in the next six), and a customer base that is leaving in droves."

The week has been cluttered with news as the media has finally realized what has been obvious for years. Manufacturing is in a tailspin in China … and is never coming back. More about it here. Strikes and labor unrest are rampant. A Chinese town is in outright revolt.

In an LA Times article, "Now one of China’s most senior leaders has acknowledged that the souring global economy has the government on edge. According to an official New China News Agency report published Saturday, China's top security chief warned provincial officials to brace for unrest if financial conditions continue to deteriorate. Zhou Yongkang, a member of China’s nine-person Politburo Standing Committee, said the country should focus on developing better social management -– a euphemism for control aimed at stamping out opposition and unrest."

Whether manufacturing comes back to the United States and Europe depends entirely on western manufacturers – if they learned their lessons and changed their ways they can have it all back; if they think all their problems are the fault of the government and unions and believe they can operate as they did before the China debacle then Mexico and southeast Asia will be the big winners from China's implosion.

Not Enough Skilled Workers?

The latest popular excuse from far too many manufacturers is a shortage of skilled workers (Never mind that many of those doing the complaining laid off machinists, welders, pipefitters and electricians by the busload over the last few years, and dismantled their apprentice programs). They might want to give some thought to how the United States almost instantly turned some 1.6 million housewives into the machinists, welders, pipefitters and electricians who cranked out ships, planes, tanks and weapons in quantities staggering enough to overwhelm Nazi Germany and Imperial Japan.

The TWI (Training Within Industry) Summit is coming up in the Spring. TWI was a vital element in Toyota's success and it represents the opportunity to make the skilled labor shortage disappear almost over night. The TWI Institute has its tentacles into just about every corner of the US. It should be on speed dial for every manufacturer.

Only eight shopping days until Christmas – have at it – the Chinese need all the help you can give them!