Manufacturing grows … again

Maybe those long lines of attendees at the FABTECH trade show last year weren’t red herrings. The Institute for Supply Management reported significant growth in manufacturing last month, news significant enough to send stocks skyward.

News coverage has been cautious, especially considering what happened 12 months ago. Stocks rose in January and throughout the first few months of 2011, only to plummet as the economy experienced one black swan event after another. Japan’s earthquakes and flooding in Southeast Asia and here in the states disrupted supply chains. The Arab Spring and European debt crisis has continued to add to our uncertainty, as well as, of course, that stubbornly high unemployment rate. So yes, if I were reacting to today’s market rise, I’d be glass-half-empty, too.

But U.S. manufacturing still seems to have a lot going for it these days. China’s government announced on Dec. 1 that its manufacturing was contracting just as labor disputes were expanding. The Asian factory worker is unhappy, and justifiably so. Ian Spaulding, managing director of the consultancy Infact Global Partners, had some insightful remarks for Bloomberg about China’s sputtering manufacturing engine. “In an environment where you have 10 to 20 percent turnover a month, managers start thinking of workers as machines. That creates resentments on both sides.”



At present, the U.S. doesn’t look like a bad place to set up shop. Yes, our corporate tax situation is a mess, as is our technical education. But here, many communities still view manufacturing as a good thing. For many places dotting the country, one large plant--and the suppliers feeding parts into it--provide the bedrock of local employment and prosperity. In recent decades people have either forgotten this or have desperately wanted to forget it. Who would celebrate a manufacturing industry that shuttered your local plant, sending your dad, mom, brothers, and sisters to the unemployment office?

Some communities now are coming back around. As manufacturing continues its resurgence, many are realizing just how good an economic bedrock manufacturing can provide. I recently talked with one shop manager who told me how various groups of local angel investors helped get a new tube bending shop off the ground (a story now slated for February’s FABRICATOR magazine). The town has a history in metal fabrication and available talent to support it. Today, both company and community are thriving.

I think people are turning around perhaps because they’re now seeing just how good surviving fabricators and other U.S. manufacturers really are. Some of the most innovative process management and automation practices are happening at small shops that can supply quality fabricated parts at a moment’s notice.

Indeed, any successful shop that has made it this far on our economic roller coaster ride is probably worth watching.  Many have made it by looking inward with continuous improvement. The same industry that gave us plant closures and mass layoffs also gave us lean manufacturing, theory of constraints, quick response manufacturing, Six Sigma, statistical process control, the plan-do-check-act cycle, and other improvement methodologies.

As legacies go, manufacturing’s may not be so bad after all.