Posted by: malstott | May 20, 2019

When ROI Doesn’t Matter

Return on Investment

A return on investment (ROI) calculation has enormous value. But, for an early stage start-up company it can be a waste of time. Let me give an example.

You are launching a product in the fall. Hard tooling for this product is a half of a million dollars. The part cost drops 90% with this investment saving about $90 per unit and improving quality. It will take 10 plus weeks to get the first parts once the green light is given. While the investment in tooling is high, the product cost for the ramp drops enough that the pay-back is in less than 6 months. In other words, it is a no-brainer financially. Invest in the tooling. Do it right. But….

  • What is the margin of error on these calculations?
  • Who funds the tooling?
  • Do we have the cash?
  • What other things could we spend that money on?
  • Can we wait 3 months after design freeze to launch this product?
  • What if we learn some things after launch and have to change the design?

Once we answer these important questions, we can look at the financial question with more clarity. In the world of start-up companies, the risk of failure is real. At the top of the list are: wrong market fit and running out of money. Being fast to adapt to customer input is very important for a small company. Customers are fickle and temperamental. The kickstarter-type might tolerate some clumsiness or an awkward interface. The mass consumer market will not if there is any other option. And not buying the product and doing “it” the old fashion way is an option.

Let’s coin a new term: Time to Market Traction or TTMT! Minimizing the time between great idea and proof of market traction or TTMT is a way to focus where to put the next dollar. How do I spend my precious cash to learn quickly, refine and then ramp? Is there a short term solution that will get me to market faster with my minimum viable product (MVP)? Do I know what will gain traction in the market?

So in priority order a start-up company should be interested in:

  1. Completing and controlling the MVP design
  2. Building some volume with predictability and quality
  3. Proving out the market
  4. Ramping to volume

The key to step 2 is to partner effectively and use technology to your advantage. Soft tooling, 3D printing, flying probe, PCBA testing, quick-turn board build and responsive EMS partners are all ways to get to step 3 quickly and effectively. But that is a topic for another blog post!

“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.”

James W. Frick
Posted by: malstott | February 24, 2019

Frugal Supply Chain

Count the Cost

Perhaps it is my mid-west upbringing. Perhaps it is a pass through from my bit of Dutch ancestry. My kids call me cheap but I proudly call myself a Frugal Execution Master. I live this way and lead this way and the results are in. Frugality leads to creativity and results and is a forcing function that limits resources in order to drive the best minimum viable product. While start-up companies usually don’t have much choice based on their financial backing, if they follow the best practices of frugal design, they will do more than save money. As Navi Radjou talks about in Jugaad Innovation, in this world of increasing constraints there is value to solving problems under pressure. Jugaad is a Hindi word that means overcoming harsh constraints by improvising an effective solution using limited resources. The key ideas to Jugaad, according to a Harvard Business Review article are:

  • Inclusion
  • Thrift
  • Bottoms Up Contribution
  • Flexible Thinking

These principals can equally and similarly apply to designing frugal supply chains which is my passion. Especially for hardware companies, these principals of frugality can guide decisions, speed up implementation and prepare companies for the twists and turns that are inevitable when launching a hardware product company. Let’s throw these key jugaad ideas into the context of supply chain design.

  1. Develop with a cross-functional team – A jugaad innovator is not solving for an elegant solution. She or he, or better yet, they (let’s be inclusive) are solving for the masses. There is a consideration of cost, availability and solution.
    1. Bring in the extended team. Pull in the manufacturing, customer service, packaging, logistics experts. Invite your target customers in. Get their input on buildability, availability, shipability and whether the product solves the problem.
    2. Talk about the costs on day one. Build a model of costs. Take all of them into account. Consider volume, minimum order quantities, supply availability, logistics, overhead, labor costs. Bring this up again and again.
    3. Pick the right partners and then leverage synergies. Know their strengths and use them to strengthen your team.
    4. Leverage what is already out there. Build on other’s ideas. Off-the-shelf and good enough is better than perfect, expensive and hard to get.
  2. Constrain cash – I am a big fan of process when the time is right but infrastructure doesn’t have to cost a lot of money. Use light-weight, cloud-based apps to solve problems. If you can’t model what you need in a spreadsheet you probably aren’t ready for an app. Go slow to go fast. Finish the design before you build in a manufacturing factory. Learn about what happens in low volume in those initial factory builds before you ramp to high volumes. Investors want to see high volume in a short time but they are also very happy to see backlog. Consider keeping some tasks in house for a while. While it can trip you up if you let it go for too long, it can be a great learning investment if done carefully.
    1. Can the team build some pre-released units?
    2. Can you ship those to your beta customers with a personalized note?
    3. Can the engineers take customer service calls for the first quarter?
  3. Listen – Usually problems are known to some before they are know to all. Listen for the canaries in your organization. Bad news is best heard early. Follow each failure to root cause and corrective action. Hold design reviews regularly and get the input from the full team.
  4. Adapt to the inevitable pitfalls – Something will go wrong. Force them to go wrong early. If you have followed the first ideas of listening to a cross-functional and engaged team, you are set up to quickly see and then have the experts to react to the problems that will come up. Watch market traction and be willing to modify or pivot. Constrain your supply until you have proven that your product hits the mark.

Frugal innovation is a process that is used in emerging markets to solve problems with local constraints. The concepts drive the innovator to do more with less and to eschew complexity and cost in favor of solving a problem for the masses. Frugal Supply Chain has other implications that I haven’t explored here. What value is there to keeping our supply chains close? Can we improve our solutions by designing our own processes rather than adapting to processes at large contract manufacturers? Do we complicate our solutions by depending on far-flung supply? Can we leverage what is already available and simply adapt to solve a problem? These are all questions for another time but as a Frugal Execution Master they are on my mind.

Without frugality none would be rich and with it very few would be poor.

Samuel Johnson English Writer 1709 – 1784

Posted by: malstott | August 23, 2018

Women in Power – News or Not?

person near mountain

Dhivya Suryadevara was recently announced as the new CFO of General Motors. This made the news because Mary Barra is the CEO of GM and now there are two women at the top of a Fortune 50 company. There are few companies able to claim this and there are no other automotive companies with two women in the c-suite. This article was posted on LinkedIn and the comments came pouring in. Along with “congratulations“, “about time” and “great news” there were some other surprising comments. Well, they were surprising to me. Perhaps they shouldn’t have been. Here are some redacted samples:

  • Does anyone really believe that two women are the best to run GM?
  • I hope that they got hired for their qualifications, not gender.
  • I hate seeing headlines like this.
  • Women are princesses and men are slaves.
  • Headline should have read “beautiful and capable women”
  • LI posts like this are a bit insulting and sexist

I am not going to argue with these although I could write a paragraph debating each. I am going to tell you why this news is important to report and why it is too early in our changing culture to let this blend into the background.

Suryadevar and Barra have done something extraordinary. They have pushed through many obstacles to get into positions of power and respect at a company that has, since its inception, been a bastion of car guys. I worked at GM as a student in the late 70’s. It was a hierarchical, male dominated, stuck in the mud, bureaucracy. It blows my mind that less than 40 years later there are not one but two women in top leadership at GM. This makes me hopeful and should inspire many women and men who want change in the way things are run in this world.

While this story is inspiring, we still have so much to work on:

Yesterday, as I talked with a great female start-up co-founder, she brought up another start-up founder that she had conferred with about a common supplier. When I referenced that connection as a “she” I did it thinking that the chances were slim that this person was indeed a she. I was pleasantly surprised to be right. Two women company founders talking about a business problem. I did a little dance!

And the story continues. Progress is being made but the rate of change is painfully slow. At least it is painful to those of us who have lived the story. As we should with all positive change in this world, let’s celebrate and call attention to the wins. Let’s call out when things are going in the right direction. Until the numbers and stories change materially, two women leading a $150B company is indeed a worthy headline.

I just love bossy women. I could be around them all day. To me, bossy is not a pejorative term at all. It means somebody’s passionate and engaged and ambitious and doesn’t mind leading.                                                                               Amy Poehler

Posted by: malstott | February 26, 2018

Ask My Daughter

socialmediaAsk my daughter if you want to know about:

  • The latest in food gadgets
  • The most effective face mask
  • Exercise trends
  • How to jump-start your metabolism
  • How to keep healthy during flu season
  • What fashion styles are coming back
  • Where to buy healthy food online
  • What restaurants are trending in the city
  • Which blogs have the best Mommy tips
  • Organic clothing companies

My daughter knows this stuff. You might think that these tidbits of information are trendy and lacking value, but you would be wrong. My friends text her for information. They take pictures of the products she is using to replicate her routine. I ask her for hair and skin advice. She…just…knows… And because she is in her 20’s, what she knows is exactly what I should know to stay relevant. I am best informed after spending time with her. She is a curator of information. She is a social media connoisseur.

This skill set is more important today than ever. With the onslaught of information that pours into our heads every day from every angle we are all in desperate need of a sieve. We need trusted sources to weed out fake news. What is true? What is valuable? Without some help here we  jump on fashion trends based on the Kardashians or we waste our money on “stuff” peddled online or we don’t even wade into the latest and greatest product because it is too hard to discern what is good and what is a waste.

My daughter knows this stuff and is a treasure trove of information. She should monetize this knowledge. Perhaps some day she will. I will be her biggest customer.

It is all that the young can do for the old, to shock them and keep them up to date.
George Bernard Shaw


Posted by: malstott | February 15, 2018

The Busy Buzz

beeHow are you?

Oh, I am very busy. The weekend was busy. The holidays were busy. My week is busy. I am booked solid. Too busy to talk. Too busy for lunch. Too busy to exercise. Sorry, can’t talk. Too busy.

Recently I had a good discussion with a co-worker about the busy buzz in Silicon Valley . We boast and brag about being busy in almost every encounter. It is a badge of success. It somehow shows that we are worth a lot and are sought after. My colleague was swearing off of the term. “It doesn’t help; it just causes stress.” This is truth and worth absorbing. What if when asked how I am I answer, “I am well. I recently had a great week of open time and breathing room and feel really good about that.” Would my value drop? Would I be seen as “on the sidelines”?

When I slow down and have space between meetings, at the end of the day or on the weekend I am more creative and get more meaningful work done. Practice makes perfect and these are things I’m trying:

  • Block out time on my calendar – Sounds simple. It is. I’m doing it.
  • A bit o’ Fitbit – I got one of these crazy devices in January. It beeps at me if I’m not moving enough during the day. While it can be irritating, it is a good reminder to get out of my chair and move around.
  • Gotta get up earlier – Getting up 1/2 an hour earlier will add space to the beginning of my day that will set the pace.
  • Walk during meetings – So much is virtual these days. I can listen and walk. I find that I am listening more attentively because I am not distracted by new emails or other tasks.
  • Less social media, more content – When I have free time, I am NOT migrating to Facebook or Instagram. I plan to grab my book, go to the NPR website, stream a podcast.
  • Network with purpose (and widen my connections) –  I plan to spend more time with others. I will mentor someone, ask for some mentoring or connect with a friend from the past.
  • Take a quiet retreat – This idea came from my colleague. He does this annually. He goes away for a few days by himself and he doesn’t communicate with anyone. No email. No phone calls. This time helps him rethink what is important and gives him energy and direction. I am planning on a day this weekend to try it. Shhhhh!

The busy man is never wise and the wise man is never busy.  Lin Yutang

Posted by: malstott | July 28, 2017

“Manufacturing Next” – Information Led

Industry 4.0Remember TQC, JIT, Quality Circles, 6 Sigma, Lean? Good stuff all, but during the frenzy of change many dollars were spent, much time was wasted and the return was often suspect. And now we have the latest batch of Good Stuff: Smart Manufacturing, Connected Enterprise, IIoT, Industry 4.0. Does this feel a little like the latest fad? When will the noise stop, the fog burn off and the way forward be clear? Perhaps never and so we can’t wait for full clarity before taking action. We have a mandate to start down the foggy path.

In order to simplify, let’s consider the theme running through each of these new concepts. The theme is “information”. We need information to guide our factories. The more the better. We need to know what is happening on the shop floor, in the supply chain, through our quality systems and at the financial level. We need this information available to us in a digestible form. Today we have data coming from many sources. Data is being generated faster and faster with 90% of all the data on earth generated in the last 2 years. Thankfully, it is getting cheaper to store and successfully analyze this information through cloud based analytics. If we are lucky we can look at much of our data through the lens of an ERP system. Perhaps some of the data comes through a data warehouse and we can query for what we need. But is this Industry 4.0? Are we “connected”? I pose that the answer is “no” but the path is less obfuscated if you keep your eye on the goal.

The following are questions to ask in order to assess your progress on this path and to make forward motion:

  • Are your physical devices connected?  – machines, devices, sensors
  • Are your internal applications connected? – inventory, orders, invoices, AP/AR, quality, process execution
  • Are you connected externally? – suppliers, customers, competition
  • Does the information flowing out of the connections come together in an actionable way? The NSF defines a “cyber-physical system” as one built from, and dependent upon, the seamless integration of computational algorithms and physical components. Industry 4.0 has been defined as the “cyber-physical phase”.
  • Is modeling of alternatives available to you in order to optimize and can you use artificial intelligence to guide and in some cases control the actions taken?
  • Are the actions generated fed back thus creating a closed loop process?

While it is impossible to create this information “machine” overnight, it is possible to generate the blueprint and develop assembly instructions. The benefits of “Manufacturing Next” are numerous but these three jump to the top:

  1. Eliminate Waste – This is the cornerstone of Lean and it is enabled through information. Do you have the right inventory in the pipeline? Are you starting jobs that can be finished without holdup? Are the products you are building in demand and shippable?
  2. Increase Efficiency – Think OEE for the enterprise. If you can measure you can improve and that is true for all steps in an enterprise.
  3. Remain (or become) Competitive – Everybody is doing it. It is enabling companies to get more from their assets, including their people. And it is enabling artificial intelligence and  increased automation which can level the manufacturing playing field. If low cost labor was the ticket to competitive manufacturing battle in the 90’s, smart use of information and automation is the key to the next decade’s competitive battle.

The basic economic resource – the means of production – is no longer capital, nor natural resources, nor labor. It is and will be knowledge.         Peter Drucker

Posted by: malstott | May 18, 2017

My Aristocratic Responsibility

Image result

French Aristocrats, c1774

You might not have acres of land or be of noble birth, but if you have a college degree today you are an aristocrat. We are a privileged, powerful few who rule most of the assets in this country. We have access to jobs and opportunities.  We typically make more money and are in higher positions of power. The top 10% of US earners made more than $133K in 2016. If you look at it in terms of assets, the top 10% own 76% of the wealth in the US. What enables this kind of income? EDUCATION. It is no surprise that families run by adults with college degrees, had a median wealth of $202,000, which is four times that of families headed by someone who only had a high school diploma.

In many cases having a college degree has little to do with our intelligence. It has to do with our privilege passed down from our parents. We were born into wealth and thus we had good nutrition, top notch schooling and then money for college. How is this so different from the aristocratic world of 18th century France? We have what we haven’t altogether earned and are in a position of privilege and power. And we must decide what to do with that power.

I hear protests. “But we have a democratic system that puts the voting power in the hands of the masses.” “Everyone can get an education if they want it enough.” “I had to work very hard to get to where I am.” Yes, yes and yes…but that doesn’t change the weight of the problem. We have a system that is swayed by money and we have such a great societal divide that getting an education isn’t just a struggle, it is an impossible dream for many.

Our privilege puts us in a position to either enable others or to take advantage of our station in life without regard to those around us. We are modern aristocrats. Here are a few thoughts on how to make a difference:

  • Invest in higher education for others. Endow scholarships, vote for bonds for the community colleges, donate your time or money to make higher education more accessible.
  • Invest in the educational structure in your local community. Read to kids. Vote for bond measures to pay teachers more, build more schools, pay for technology. Donate useful equipment to high schools so that they can teach shop classes, programming classes, robot automation classes. Do this even if you don’t have any children.
  • Influence policy in your company, train your people. Train them for the new work. Hire people with aptitude and train them to fix machines, program robots and design IT systems. Don’t stop this if they leave after getting trained. Consider this an investment in the future of the country.
  • Take a risk on building product in the US. Find a partner to work with if you don’t have internal manufacturing. Or, better yet, build your own plant. Figure out how to make the numbers work by building in the right places with the right processes.
  • Encourage your employees to go back to school for more education. Help them with the cost and the time.
  • Embrace a variety of educational backgrounds as you hire. An education in the Navy is valuable. A two year hands-on degree has great practical value.

Purdue University made a bold move recently to buy Kaplan University, an online university that has 15 campuses and learning centers and 32,000 students. Adding this capacity and capability expands the reach of post-secondary education to working adults and others unable to participate in traditional campus study. This decision comes on top of a measured decision to increase enrollment at Purdue while keeping tuition fixed at 2012 levels through the 2018-19 academic year.  This will be a run of six straight years of flat tuition after 36 years of increases. (Full disclosure: I am a Purdue graduate.) I have high respect for these decisions and their aim. This kind of progress and purposeful decision-making will open doors to many more people and will start to make a difference.

It is very difficult to move the needle in the imbalance in wealth and education that we are currently experiencing. But we should be on a mission to try as good aristocrats. We have an obligation.

Training is everything. The peach was once a bitter almond; cauliflower is nothing but cabbage with a college education.
Mark Twain

Posted by: malstott | April 20, 2017

Dear CEO – You Need Operations Help

Image result for image of hikingThe feeling is like climbing up a hill only to realize that the much bigger mountain is up ahead of the rise you just climbed.  You thought that all was well. The engineering team has working prototypes. Sure, they were made in the lab with machined parts and tape and glue, but they work. Customers are anxious to get their hands on units. Investors want to see the numbers. There is pressure to show revenue and to talk through the path to profitability. Reality hits. The questions start to pour in:

  • Who will build in volume? Do we start in China? Can we start locally and move later? Should we build in-house?
  • How much will it cost? Really? That much? Why didn’t I know about those adders?
  • How do they know what to build? Why isn’t our spreadsheet good enough?
  • How do we get our mechanical parts for much less? Tooling cycle times are how long?
  • What are the processes we should use to keep labor costs in check? Oh, we are not designed for automation?
  • How do we ship this product? Will our box withstand global shipment? How do we know?
  • Should we differentiate for different geographies? How many assemblies will that be? How do we structure? What about documentation?
  • Who will service our customers? Can we handle the volume of calls in-house?
  • Where do we hold our inventory? Who will fulfill? Who will export? What are the cost implications?

If these questions are coming up, you should have hired operations expertise already. If they haven’t yet come up, then act now. Ideally, the operations problems are solved in parallel with the design and both sides are influenced by the other. If done in serial there will be some rework. What are the options for a CEO?

  1. Hire a full time operations expert. In order to have the right breath of expertise the hire needs to be hands on and at a high enough level to have experienced all of the key elements of product launch. If this person is your first ops hire it will be a challenge to attract the right person who will remain the right person as you scale. This alternative might be the most expensive but the benefit is that you have a team player on board who is part of the company story and will provide continuity.
  2. Hire a consultant. Bring in someone(s) who has exactly what you need at exactly the right time. If you partner with the right consulting group you will be able to tap into a breadth of experiences and levels and can dial up and down the resources as needed. Ideally there should be a lead person who has the depth and breadth of experience. Bringing in experts will save you more money than you spend. Consider this an investment and an accelerator to volume.
  3. Hire a buyer and manufacturing engineer who have the experience and willingness to wear many hats. Supplement with your own operations leadership or with leadership from your VP of Finance or Engineering. The leadership can’t be taken lightly and you must honestly assess those skills. Don’t kid yourself. Launching a product into a supply chain is complicated and requires time and experience or costly mistakes can be made. You can delay hiring a VP or Director of Operations only if another senior leader has the time, experience and interest to lead. Or you can hire a consultant to act in this interim role.

Warning! Blatant promotion coming:  You should hire me as an operations consultant. I’ve worked in and with many start-up companies. I’ve seen costly mistakes made because the operations tasks were overlooked. I know what to look for and avoid. I would much rather help you avoid than help you fix and clean-up. I am a doer. I like owning things and delivering to the bottom line. I am a firm believer in understanding enough about the problem to ask the right questions. And I can smell discontinuities. I know how to proceed with gnarly tasks because I’ve had the experiences and possess the intuition to make this work instinctual. I know others in the field and can bring in the right person at the right time to solve the problem most effectively. Yes, you should hire me or someone like me if you have started to notice that there is a mountain of work ahead and you don’t have on good hiking shoes!

I don’t spend my time pontificating about high-concept things; I spend my time solving engineering and manufacturing problems.       Elon Musk


OpsTrak Consulting      925-437-4125


Posted by: malstott | March 24, 2017

I Know How it Feels

Council of the Baltic Sea States Summit 2012…when the handshake isn’t returned…when the answers to your questions are directed to the man in the room…when the good point you make is ignored until it is restated by your male peer…when eye contact is not made, invitations are not extended, emails are not returned, smiles are for the wrong reasons, hard work is not rewarded, …

As a woman executive in a technology field I’ve often been asked if it was harder for me to progress through my career as a woman. When I try to think of the big stories, I come up empty-handed. I was not blatantly discriminated against. No boss ever hit on me. I wasn’t asked to get the coffee or clean up the dishes in the break room. I have done well in my career. I started as an engineer and have been at the VP level at several exciting companies. Based on outward signs I’ve “made it”. But there is something not quite right about the journey that I only now am able to articulate and even now it is blurry and inconclusive.

The challenges faced by a woman in business are usually very subtle and thus are often dismissed or minimized. As a 30-year-old manager working with a Korean supplier I was surprised to find that the leaders would only talk with the men on my team. They would not shake hands with me. I had to convey my messages through the guys to get action. It was appalling and disheartening. But hey, this was another country with cultural hang-ups. It wouldn’t happen in the US…. But it did. As I rose through the ranks and engaged with other companies I realized that some men across the table did not make eye contact with me. Perhaps they answered my questions, but the answer was directed at the man in the room. At the end of the meeting there were awkward moments when I stuck my hand out with no response from the other. It was subtle. Maybe no one else saw. But I saw it and felt the impact.

The first reaction to a discriminatory snub is disbelief. That didn’t really happen, did it? I must be imagining. And then you try to write it off. It wasn’t personal. I don’t need to be bitchy about it. And then anger creeps in. What the heck. I was just dissed. Finally, you try to fix it. I’ll be more direct. I’ll call the guy on the phone.  A happy ending to this kind of cycle is when I pull the offender to my side. I show him my capabilities and he comes around. He listens and I’m given respect. Ah, but the energy expended takes a toll.

Next time I’m asked if it was harder for me as a woman I plan to say yes. But the stories aren’t grand and there is nothing obvious about the slightly steeper slope that I had to climb, but it was steeper for many subtle reasons.

I hope you will find some way to break the rules and make a little trouble out there. And I also hope that you will choose to make some of that trouble on behalf of women.”                              Nora Ephron, screenwriter

Posted by: malstott | March 7, 2017

Made in USA: How We Do It Matters

house-of-strawHuff and Puff and Blow that Economy Down…

What is not to like about more US manufacturing? It is important to our economy, to national security and to the individuals needing jobs and purpose. A nation should be able to build the things that it needs. A hollowed out economy that is only exporting services is not a long term play.

But a revolution is not the solution. Shaming companies to come back is also not a simple anecdote. It took us over 20 years to dismantle our manufacturing prowess. We can’t bring it back overnight. Without some planning we will build a house of straw. We will alienate our trading partners. We will bring back jobs that we can’t fill because we don’t have trained workers. We will try to use the same processes and facilities we have always used and the result will be poor quality and expensive product. We will impact our economy because our goods will be more expensive. Finally, retaliation by other countries will slow down the exporting that we do today. The right way to bring back manufacturing is to consider all of the aspects of a strong foundation and to build a house out of brick. What will that entail?

  • Focus – What kind of manufacturing is right for this country? Given our higher standard of living we will not find enough workers for low skill tasks. The best products for re-shoring can be manufactured using automation, are high value or are heavy or bulky. Those kinds of products don’t rely on low wage workers and they cost a lot to move around. If the market is here you can eliminate shipping costs by building here. We also should consider where we can bring a competitive advantage. If we have access to materials and other natural resources, design expertise or automation capability we can do a better job than the competition and build product for the US market and also successfully export. Examples of good products for US manufacturing are appliances, vehicles, expensive electronic devices, machinery, robots and construction materials. It also makes sense to build close to home when a product is difficult to build and contains a lot of intellectual property. The interaction between manufacturing and design engineering is critical during a fast ramp and doing that close to home has time to market advantage. Time is money and fast to market protects IP.
  • Infrastructure – We need better roads and power and better access to human resource. State government officials in some locations are working on this. Kentucky, South Carolina, Tennessee  and Alabama are attracting more than their fair share of new manufacturing jobs because they have favorable policies, strengthening infrastructure and active government programs aimed at attracting companies. Each state needs to craft policies to attract the kind of industry that will be beneficial to the population.
  • Prepare the Workforce – In a 60 Minutes interview Tim Cook, the Apple CEO, said that one of the reasons that Apple needs to build phones in China is that the US doesn’t have a trained manufacturing labor force. The obstacle is not so great. If we package training with job opportunity at a living wage, the workforce will be available. Apple can not afford much labor content with this model but automation is a way around that roadblock. Increased automation will generate the need for other skills that we currently lack in the US. We need more manufacturing savvy engineers. We have the best higher education system in the world and there are many excellent programs that can meet this need. Those programs train engineers for the whole world. We can harness that momentum for our own workforce through part-time, online or even full time degree or certificate programs that are sponsored by companies in need of talent. This is an investment worth making and where some profit should be directed.
  • Government Support – Of course tax reduction is what comes to mind here and perhaps President Trump’s intention to increase the tax burden on companies importing goods will help fund education or infrastructure. But there are other ways our government can have a direct impact on a continuing manufacturing renaissance.
    • Training program sponsorship or tax credits
    • Increased community college support for practical apprenticeship type programs
    • Higher education support in the form of manufacturing and technology research grants
    • State or Federally sponsored manufacturing initiatives used to focus funds and research
    • Increased vigilance for fair trade 
    • Logical and sustainable regulations that solve for both competitiveness and the environment.
  • Leadership and Vision – When I worked with Canon, I was told that Canon just did not understand our actions. HP was making decisions for our stockholders. We were trying to minimize the tax burden and they felt that taxes were a patriotic duty. Losing jobs to China was a defeat and there was much debate prior to any movement of manufacturing. They believed that they could build the product with higher quality and with more process technology and therefore it would ultimately be less expensive. Perhaps we can’t turn public international companies into patriotic entities but with more visionary leadership and more action that drives innovation and competitiveness right here in the US,  companies can find a win for US manufacturing and for stockholders. The win is there. It will take leadership to invest in factories, commit to a plan that isn’t easy to pull off in the short term and then execute with determination.

There is a path to solid manufacturing growth in the US. It isn’t a move back to the 1970’s. We won’t go back to what manufacturing looked like then but neither will the rest of the world. The new era of manufacturing will be lean and automated. It will require an educated workforce and a supportive government. We will need the willpower and the leadership at high levels in government and industry to take a stand and to chart a path to a successful win-win future where the consumer gets a good “Made in the USA” product at a competitive price.

“All human situations have their inconveniences. We feel those of the present but neither see nor feel those of the future; and hence we often make troublesome changes without amendment, and frequently for the worse.”     Benjamin Franklin

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