Posted by Ranga Bodla, Wholesale Distribution Industry Lead
The images we have of American industry are often bleak -- shuttered plants, rusting steel mills and deserted Detroit neighborhoods. But while the traditional Rust Belt towns may not be the industrial hubs they once were, American manufacturers are still here, and they're thriving. They just don’t look quite like manufacturers of 30 years ago.
In fact, the U.S. is the world's second largest manufacturer, after China, with a global share of 17-18 percent, according to a United Nations data for 2013. What makes things different today is the much greater focus on innovation and technology to compete.
That’s the premise of a PBS documentary, Made in America, which takes viewers on a tour of several successful manufacturing companies around the U.S.: an auto plant that puts robots on its assembly lines; a steel mill that uses electrodes to produce fresh steel from scrap metal; a robotics startup working to create a market for home robots; and a shipyard that has adopted and modified the lean manufacturing method to speed the assembly of aircraft carriers. Even Facebook is included, as a maker of connections, applications and conversations rather than TVs or textiles.
Made in Americanotes that U.S. companies are no longer focused on assembling widgets but, rather, on developing novel technologies, production processes and approaches to doing business. Information and communications, not steel and plastic, are the raw materials of this new economy.
For instance, Willow Garage, a Silicon Valley maker of consumer robots is striving to develop robots that can do home tasks, like washing dishes, making cookies or folding laundry. Its goal is to create new capabilities and uses for intelligent robots, not churn out mass produced products.
Another firm featured in Made in America, Nucor Corp., recycles scrap metal into new steel. Nucor succeeded while many other U.S. steel companies languished in the ‘70s and ‘80s by forging a culture of innovative thinking among employees and encouraging them to investigate new ways of producing metals. One of its early successes was to turn to high-heat electric arc furnaces to generate the temperatures needed to melt scrap metal and recycle it into fresh steel. Today it churns out 22 million tons of steel a year.
Innovations in IT have enabled manufacturers to achieve greater efficiencies as well. The advent of cloud-based applications means that a manufacturer can keepall of its enterprise data and processes in one integrated application suite. Cloud-based computing, in which all of the software, hardware and IT management are handled by the cloud provider, has freed companies from the cost of troubleshooting and upgrading their in-house systems. Because these new manufacturing software solutions are based on web architecture, they also make it easier to share data with supply chain partners and customers and allow remote and mobile employees to work on the same applications as those at headquarters. And with all of the data and processes in one cloud application, executives have greater visibility into all of the company's data. Imagine the intelligence a company can gain from being able to analyze, collectively, all of its supply chain, inventory, sales and financial data, and get real-time answers to questions about performance or expenses.
Mystery Ranch, a U.S. manufacturer of high-end backpacks and backpacking accessories, purposely designs and builds packs for firefighters, Special Forces, first responders, backpack hunters and backpackers. Located in Bozeman, Mont., Mystery Ranch has more than 110 employees. It runs NetSuite for its design and engineering, production, quality control, research and testing, manufacturing, inventory management, employee management, financials, vendor relations, ecommerce platform, sales and marketing. NetSuite’s ability to expand for growth provides the business with the necessary tools for continued success.
IT innovations like cloud computing mean U.S. manufacturers can be more efficient, competitive, and profitable. That includes NetSuite companies like Mystery Ranch, Liberty Bottleworks, a maker of metal bottles for athletes, Manduka, which makes yoga gear, all of which are thriving.
American manufacturing is a constantly changing industry, but it continues to produce a tremendous amount of value. As the host of Made in America, Yul Kwon, observes, "A revolution is unfolding around us. Our factories don't look like they used to. They require fewer people and make different products. But we make more now than at any time in our history."
American manufacturers, as it turns out, are alive and doing well as innovative participants in our high-tech economy.