15 March 2011

American idol

The UK has long been a follower of US fashion.
Bob Davis of the Association for Manufacturing Excellence tells Max Gosney about the latest manufacturing trends heading our way across the Atlantic

They had Elvis, we had Cliff Richard. They founded McDonalds, we created Wimpy. Where the US goes, the UK usually follows. It's as true of manufacturing as pop music and fast food. And 100 years after the mass assembly line came across the Atlantic, there are a number of manufacturing trends worth keeping an eye on, says Bob Davis of the Association for Manufacturing Excellence (AME).

"All the talk is about repatriating," explains Davis, president of the UK arm of AME (www.ame-uk.org), a US-based group promoting manufacturing best practice among its 6,000-plus members. "A lot of US manufacturing moved offshore to countries like China because it was cheaper. But now there's a real sense of let's bring it back home."

The movement is driven by economic pressures as much as any patriotic fervour, adds Davis. "People are starting to look at the total cost of dealing with China. The price of transporting goods by sea is rising and so is the time it's taking to transport. The rise in oil prices means shipping companies are increasing fees and slowing down boats to conserve fuel." Production costs are also on an upward curve. China is increasing employee wages, says Davis. Input prices also stand at an inflationary high with copper, steel and fuel all on the rise according to latest Purchasing Managers' Index data.

It's leaving many stateside debating whether domestic manufacturers adopting lean techniques could be a viable alternative, says Davis. Repatriation was certainly a dominant talking point at AME's annual conference in Baltimore last autumn, he says. Nearly 2,000 manufacturing representatives gathered at the event to share best practice on the latest lean management and operational techniques.

One popular talking point was a technique often regarded as little more than a corporate cliché back in the UK. "I hate the phrase, but companies are realising the value of empowering their people," says Davis. "Firms are appreciating that the most important thing they can do is develop their people." US manufacturers make a big effort to involve their workforce in the business, he adds. "There's top-down communication on how the business is doing, warts and all. The businesses with vision are saying, 'what's wrong with that? Why do we care if workers know how well we're doing?'"

To script, the US have no problems with being brash whereas the British are full of reserve. "I think in the UK there's a fear that if the workers know we're doing well they'll ask for a pay rise," says Davis. "In the US you'll find the view that if we're doing well that's partly down to the workforce so why wouldn't you pay them more?" The inclusive approach allows manufacturers to retain good staff says Davis. "People move because they're pissed off or they want more money. If they feel involved, why would they move if there's a chance for them to grow personally?"

And this is not a continuous improvement tool that is consigned to the factory floor, adds Davis. "When you look at lean over in the UK, a lot of activity is focused on the shopfloor. But the techniques are as valid in the purchasing department as the production line. You've got to get everybody believing." Snap 10-minute meetings are a favoured technique for getting staff on side, he says. US sites also benefit from a much more constructive dialogue with unions over lean management: "A lot of unions in the US are seeing the implementation of lean as a benefit for employees."

But not everything in US manufacturing is bigger and better, reflects Davis. "Those people that have got it – the ones at the cutting edge of continuous improvement – are doing it. That's no different to the UK." US manufacturers' grasp of people power, though, does provide a valuable lesson for UK colleagues, concludes Davis. "You're not going to get a CI programme to work without the people to back it. Before you start the journey you've got to get the best people in place. If you can get the right people, then you're going to make it a success."

A special relationship

Typecast as an industry in decline and seen as a career to avoid by bright youngsters. The UK and US might be separated by over 3,000 miles of ocean, but both share some common traits. The US has seen the number of people employed in manufacturing decline by more than five million between 1977 and 2005. Yet, like the UK, US manufacturers have compensated the decline with an expansion in value-added work. The productivity boom has been aided by widespread rollout of continuous improvement programmes, aided by AME. The organisation was set up in 1985 in the Chicago area to help companies perfect lean programmes. AME operates in eight regions across the US and under franchise in the UK, Australia and Canada. Its mission remains to help manufacturers achieve operational excellence through shared learning and access to best practice.

Max Gosney

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