Keeping manufacturing competitive

The perspective was unique, but the advice was familiar: Innovation is the key to remaining competitive on the world stage.



That was the message manufacturing experts with deep knowledge of the global marketplace sent to attendees at the Competitive Manufacturing Strategies session of the Pan IIT conference, a networking event for graduates of the Indian Institute of Technology, in Schaumburg, Ill., on Oct. 10. The panelists for the session, moderated by Mike Guerin, CEO, Amada America, were Ashutosh Padhi, a partner with McKinsey & Co.; Om Nalamasu, vice president of advanced technologies, Applied Materials; and Bharat Vedak, senior vice president, intelligent solutions group, Deere & Co.



Guerin set the stage for the discussion by describing the situation most fabricators face today: trying to deliver quality parts in a just-in-time fashion as orders become more varied and volumes continue to shrink.



Padhi didn't have comforting news for manufacturers in attendance. "The biggest wave of manufacturing offshoring is yet to come," he said.


That first wave wiped out manufacturing companies in the U.S., such as toy and textile producers. The second wave will target "skill-intensive" industries, he said, such as automotive components, fabricating metals, machinery, pharmaceuticals, and telecom equipment. Padhi predicted that imports in these areas will jump fivefold by 2014.



"This is a challenge for leaders to think about: innovation," Padhi said.



Nalamasu, also the deputy corporate chief technology officer for Applied Materials, a $6 billion company with more than 13,000 employees, said he believes nanotechnology is the solution to many of the problems his generation faces. It is contributing to the possibility of affordable power generation through solar panels, which are now more cost effective to manufacture on a large scale, and promises to revolutionize the lighting industry when companies start to develop LED lighting products for the general illumination market.



Deere & Co. is more closely aligned with general metals-related manufacturing, but it too is relying on innovative technologies to separate itself from its global competitors. Through the use of global positioning and robotic technologies, Deere is developing products that help its agricultural and industrial customers accomplish more with fewer resources, according to Vedak.



However, even with the commitment to innovation, Vedak said Deere is reinvigorating itself with internal programs to eliminate waste and improve quality. In fact, the John Deere Quality Production System launched this year promises to save the $28 billion company thousands in program efficiencies and process improvements.



Padhi offered several points for manufacturing companies to consider as they prepare themselves to be more competitive:

1. Is the company buying too many components instead of manufacturing them themselves or not developing a reliable supply chain?


2. Is the company positioning itself to be more environmentally friendly, which can translate into growth?


3. Have all competitors and potential competitors been identified and studied?


4. Would the company be better off with regional locations?


5. Has the company truly done its best to implement lean manufacturing programs?


6. Does the company concentrate too much on margins and not enough on asset productivity?


7. Does the company have the right culture to support innovation and competitiveness?