Posted by James Pasmantier at 8:00 AM, April 26, 2012
This post is part of the Innovation Management Practitioners Blog series.
United States may continue to be a dominant player adding to the global manufacturing output, but by smaller margins than in the past. The decline of US manufacturing compared with the rest of the world showcases the dominance of emerging economies such as China that are doubling total output (see stats here and here). The gap could become even larger as emerging market manufacturers around the world have demonstrated success through government support and focus on advanced manufacturing. In June 2011, the United States President’s Council of Advisors on Science and Technology (PCAST) released their Report to the President on Ensuring American Leadership in Advanced Manufacturing, which delineates the issues with the current state of manufacturing in the U.S. in comparison and that, “as U.S. leadership in manufacturing declines, other nations are investing heavily in advancing their manufacturing leadership, innovation systems, and R&D. As hopes to increase jobs and support the advancement of a robust manufacturing continue, private companies are exploring how innovation can spur growth, cost-savings, and efficiency through initiatives designed specifically to fuel innovation.
According to a 2011
Report from General Electric and the Economist Intelligence Unit, 90% of manufacturing executives view innovation as key to long-term prosperity. They also asked executives how US manufacturers could increase innovation in their companies and 38% reported that “encouraging internal innovation competitions or an initiative” is the way to go. Boeing, the world’s largest aerospace company, has had a long history of emphasizing innovation through campaigns and programs tied to the manufacturing process, a strategy that has provided them with a competitive edge and long-term success as a leading US exporter.
Government support may also prove to help to boost US manufacturing. Len Sauers, Vice President of global sustainability at Procter & Gamble, believes, “government has a critical place at the table in helping to spawn manufacturing innovation,” such as being capable of providing tax incentives to corporations, as well as investing in math and science education. Support from the government is growing as President Obama recently announced a proposal for a $1 billion National Network for Manufacturing Innovation, aimed at creating “regional hubs of manufacturing excellence that will help to make our manufacturers more competitive and encourage investment in the United States.” This initiative will bring together experts from government, universities, and industry to provide state-of-the-art technologies to companies and promote education in advanced manufacturing. Boeing has benefitted from a close relationship the with U.S. government thanks to defense contracts, although the company continues to view its employees and business structure as essential to their innovation success.
Nevertheless, the Economist Intelligence Unit indicates that, “manufacturers are not looking to government to solve all their problems: most point to business-led initiatives as being key.” Many business-led initiatives concentrate on innovation and view it as vital to ensuring a lucrative future. Let’s take a look at a specific industry and a few private companies tackling the challenges of innovation in manufacturing with new approaches and fresh insights.
US Auto Manufacturing
With the highly publicized U.S. automotive industry crisis, American auto manufacturing has been in need of a significant overhaul. U.S. automakers have been looking for innovative ways to make their cars more energy efficient and appealing to customers, as well as improve safety and manufacturing efficiency. The Ford Motor Company has been on the forefront of auto innovation since its inception in 1903 by introducing the concepts of mass production and moving assembly lines. The company continues to revolutionize auto innovation with a new virtual manufacturing toolset, a high-tech system that has allowed designers to locate and fix assembly problems years in advance and has even shaved off a year new auto manufacturing from design to production.
After the bail out other auto companies have been successfully changing their operations completely. One example is General Motors (GM), which has chosen to focus on four core brands, Chevrolet, Buick, Cadillac, and GMC, therefore eliminating the need for the company to compete with itself. GM has also launched the innovative Chevy Volt, the first mass produced plug-in hybrid available in the US. The results have been good, as the company’s profits were up 11% in 2011.
Another area of manufacturing innovation comes through incremental safety and process improvement. Several auto and CPG manufacturing companies see the factory floor as an essential component of the innovation challenge. Whether through setting up kiosks that easily allow people to submit ideas or by setting up systems where workers can submit ideas to managers daily, Brightidea software can support a robust factory floor program that taps workers about safety ideas and process improvements. These small ideas add up to create big value for companies and are promoting lean manufacturing. As incremental ideas add up to big savings in safety and identify efficiencies, factory lines work smarter.
Bosch Corporation, one of the largest power tool and accessory manufacturers in the world, has managed keep pace with manufacturing by opening up the company to co-creation. The company was already a leader in manufacturing for its specific market, but also looked to maximize growth by evolving their products, rather than depend on its staple line of tools. Therefore, Bosch looked outside their company for ideas on how to make their products better. Using Brightidea software, the company launched a series of online communities where the public could submit ideas on new accessories or changes to existing products. This initiative has been successful in giving Bosch insight on its customers wants and needs, in addition to providing the company with valuable ideas to enhance their products. Bosch continues to expand its focus on manufacturing co-creation to additional tool lines and has begun the implementation of selected ideas, to be released soon.
A focus innovation is not new at Emerson (NYSE: EMR), a Fortune 500 global manufacturing and technology company. Since 2008, the company’s Embedded Computing & Power business unit established and employed a formalized innovation process assuring that Emerson remain at the forefront of innovative manufacturing within it markets. The company has taken advantage of a resource comprised of knowledgeable employees through a Brightidea-powered innovation portal that has hosted numerous campaigns throughout different departments. Emerson’s innovation strategy has had great success, a strategy that continues to evolve through testing and development.
There is no doubt that as the US continues to recover, the age old need to not only invent things but also ‘make things’ is an important component of long-term economic stability. By increasing exports and reviving manufacturing through both private efforts and government incentives, the US can continue to create jobs and sustain growth. An effective innovation model for manufacturing involves not only big ideas, but continuous incremental improvements that keep the factory floor efficient and safe. It remains to be seen, but so far, the effects of ‘an increasing number of manufacturers are using software packages and other technologies to improve their business performance,’ is certainly making an impact on the overall health of the manufacturing industry in the US.