Set Aside the Silos for Reshoring Success
Category: Supply Chain • By: David Burns, Senior Advisor, AMT - The Association For Manufacturing Technology • Jul 21, 2021
The pandemic provided us with an extended time for self-reflection and for taking a renewed look at our friends, family, and the world around us. Or perhaps the last thing some of us wanted was the luxury of deeply reflecting, scrambling to keep a business afloat, figuring out schooling, or finding toilet paper.
I bring up that last item because no matter who you are or what you do, all of us are now acutely aware of supply disruptions of one type or another (e.g., semiconductors).
Because of my four-decade immersion in the world of manufacturing technology, its evolution fascinates me, especially the exposure of our lengthy and fragile global supply chains and subsequent stirring of the reshoring debate.
“Made-in-America.” Those words sound compelling, and the forces that drive the decision to reshore are, in fact, compelling. But when we move to a deeper level in that discussion, I would contend that we have some major decisions to make if we wish to accomplish even a modest reshoring goal.
Doing some back-of-the-envelope calculations with an economist friend (AMT chief knowledge officer Pat McGibbon), we realized two critical factors. First, the immensity of the issue. We would need tens of billions in investment to bring back just one quarter of the manufacturing capacity shipped overseas. (For example, President Biden has proposed a $50 billion investment for chip manufacturing alone). Second, we can’t simply duplicate here what they are doing over there and expect to be competitive. In fact, simple duplication might be a mistake.
A Framework for Success
Based on my time working in the manufacturing technology industry, my sense of a conceptual framework for the future evolution of manufacturing technology is formed by two big groups of ideas.
First, to elevate manufacturing productivity, we need to embrace a comprehensive view of what manufacturing includes. I would propose that view include:
- Conceptualization, or the period of time from the moment that the idea for a manufactured part is spawned through its design life.
- Materialization, which covers the time from material selection to material formation to part completion.
- Utilization, including part use, performance, and disposal or recycle.
Second, the current set of manufacturing tools under development – what I have coined the dynamic digital manufacturing technology tools – are most useful when fully integrated with each other. In fact, I consider a holistic approach to be a prerequisite for success when implementing digital technologies.
Silos vs. Connect Systems
To appreciate what I mean by holistic, I believe that our global manufacturing infrastructure has largely evolved as asynchronous silos. We consciously created separate departments for design, engineering, manufacturing, quality, purchasing, sales, marketing, and management. Because they are asynchronous, a silo can be changed without huge concerns about other silos. Technologies have evolved somewhat independently of each other, and manufacturing management worldwide has done a tremendous job of forcing the pieces to work together.
It is a different story with the emerging dynamic digital technologies. To truly reap the productivity benefits inherent in these digital technologies, we can’t implement them in a piecemeal fashion or independently of each other. We need to elevate our game by thinking holistically – the technologies need to be installed as a comprehensive whole. The good news is that, if we can transform the entire supply chain (separate but connected links) into a digital thread (a continuum), we have the chance to achieve manufacturing productivities beyond what we have ever achieved.
Now let us return to reshoring and my musings over the last year. Should we manage to gather the financial, political, and corporate mettle essential to creating a new manufacturing infrastructure in the U.S. (as I believe we must), then we face a critical fork in the road:
- Do we invest tens of billions in a siloed manufacturing structure with proven capabilities – even though we know that dynamic digital technologies will replace them in the future?
- Or do we make huge investments in emerging digital technologies and re-establish our manufacturing infrastructure using a holistic approach? Are we willing to experience growing pains yet proceed with confidence?
These are big, tough questions. The answers to them will shape the development of manufacturing technology – if not the course of U.S. history – for many years ahead.
About the Author
David Burns, Senior Advisor, AMT – The Association For Manufacturing Technology
Principal and Founder, Global Business Advisory Services LLC
With more than 40 years of manufacturing technology experience, Burns believes that dynamic digital manufacturing technologies form a framework for success. He often poses some tough questions — with answers that will shape the development of manufacturing technology.