Manufacturing’s golden age was a time of makers. The resounding boom felt in the economy was a byproduct of new ideas rapidly forming and coming to life by any means possible. Emphasis was put on creation and both sides of the manufacturing process—manufacturers and suppliers—were profitable. In turn, those profits spun off into new products and immense scale.
But as the sound waves of that boom have dissipated over the past 60 years, we’ve watched US manufacturing rapidly decline and jobs vacate the country.
We blame foreign competition, the government, technology and anything else we can blame. All certainly have had their effect, but here within our very own borders both sides of our manufacturing process have also contributed to ushering in an era of distrust and competitive hostility in US manufacturing.
One example is the practice of scooping up suppliers to swamp them and “take them off the market.”
Additionally, raking shops through rigorous hoops, time-intensive RFQs, requirements for first rights to entire shifts, mandating that capacity remains open, and requiring manufacturing costs to be lowered without design updates or changes is harmful.
How can suppliers properly diversify, invest, or even manage their growth if they’ve committed to the strain of performing at the snap of these manufacturers?
On the other side, however, suppliers continued to agree to these terms—all the while attempting cost-cutting approaches in the background that only led to business degradation.
Lack of quality and vital communication became issues, and contracts were lost. They took on work that wasn’t suited to them because they never knew where the next job would come from. Even though help was right around the corner, suppliers always worried the “next guy” would steal their customer.
We need each other
My grandfather told me, “a good deal is one that is good for both parties involved.” So as we say goodbye to the golden age of manufacturing and welcome a new age, we again see an explosion in product SKUs and a renewed commitment to making. OEMs have increased the diversification of their product lines to respond to ever-changing consumer demands.
But we’ve also seen the rise of entrepreneurs and prosumers delivering products to market at rates never before seen. All competing for available resources and talent.
Good deals are emerging for the taking, but if we continue to operate the way we have, we will fall short as a whole.
We are now more connected than ever before. This idea is painfully illustrated in a recent example where a port strike caused 20¢ parts to sit in crates in Los Angeles, CA, putting a billion-dollar company on hold.
OEMs sat helpless while tens of thousands of hours of available capacity were within shouting distance.
There is more out there—if you look
Simply investing in technology to improve how we manufacture is not enough. We must invest in each other.
Additional capabilities can be brought to the table for both manufacturers and suppliers by allowing others in. Strategic partnerships will move the needle because there’s simply not enough time.
Companies that win will be the companies that are more connected and more trustworthy—not the other way around.
It could mean encouraging procurement staff to adopt new techniques that optimize flexibility and efficiency at scale. Or it could mean sharing your anonymized data to help others, only to gain efficiencies and speed for your own organization.
However we choose to move into this new age, opening our eyes to connected ways of solving the inefficiencies of our business processes will be critical.
If we do, the type of shared growth we’ll see on all sides of the manufacturing process will dwarf what we witnessed a mere 100 years ago.