Manufacturing Human Experience “What we Make, Makes Us”

1. Manufacturing Human Experience“What we Make, Makes Us”

2. Response to Change "Like England's battles were won on the playing fields of Eton, America's were won on the assembly lines of Detroit." - Walter Reuther

3. History of Manufacturing’s Role? These responsiveness of our manufacturing industry has historically helped increase the pace of economic growth and helped create economic opportunity, e.g. Henry Ford and the B24. The fact that our economy is facing grave challenges today only evidences insufficient understanding of and commitment to the manufacturing industry. NEW factors: • Shorter product lifecycle • Automation • SMART products (and more complex!)

4. TO manufacture or NOT to manufacture - is there a choice? The Engine of the US Economy: • Innovation (new approaches to past and present problems) • Manufacturing (to deploy technology) Risks of choosing ONLY one of the two: • (One man’s pain is another man’s …)Solutions don’t address the right problem • Reduction to 3rd World Status – having to purchase others’ solutions (based on tipping the balance of trade – no revenue for the innovation)

5. Who’s more adaptive? – the ‘Rust Belt’!

6. Popular conceptions about manufacturing… Manufacturing is NOT factories! ‘Conventional wisdom’ states that manufacturing is dead in the U.S. and that we should abandon it for the greener pastures of innovation… …this would be a deathblow to the U.S. economy. The truth is that manufacturing has special growth-inducing properties that are poorly understood – it is the avenue for deploying new technology and new solutions to the problems we face… Solution/innovation without deployment is ineffectual!

7. Manufacturing and Growth The FORMULA for Economic Growth: • (Ability to Address Specific Needs) Enable specialization in the production process • (Efficient Delivery of New Technology) Develop and disseminate technology throughout the economy. Research in economics, stretching back through Alfred Marshall to Adam Smith, and forward in this century to Allyn Young, Nicholas Kaldor, shows that that manufacturing industries are the economy’s most prolific generators and disseminators of technology and that this function is a predominant influence on overall output and productivity growth. In this regard, manufacturing industries are properly described as engines of economic growth.

8. Systemics of Manufacturing in the Economy Further evidence comes from official estimates of inter-industry input-output and employment relationships: …both indicate that compared with nonmanufacturing industries, manufacturing: • involves more numerous and varied inputs of goods and services • cultivates a greater variety of production skills Simply put, manufacturing exercises the economy more broadly than other kinds of production activity.

9. “Imported from Detroit” The new face of American manufacturing reflects a process of relentless, technology-driven change in the: • composition of production • quantities and mix of skills required, and • organization of U.S. manufacturing firms These changes constitute the structure and substance of the growth process itself.

10. Change in the Composition of Output Experience shows that growth manufacturing industries is concentrated in a relatively limited group of industries that: • gain output share quickly • displacing predecessors • creating new venues for enterprise and employment The most dramatic of these changes reflect major advances in product and process technology—e.g., in recent decades: • the emergence and explosive growth of the computer and related industries • the substitution of plastics for steel in auto production

11. Change in the Composition of Employment Though manufacturing industries have supplied a relatively constant share of GDP for half a century, the direct link between growth in manufacturing output and the spread of economic opportunity in America is now more tenuous: • manufacturing accounts for a steadily declining share of total U.S. employment • compared with the 1960s, proportionately fewer manufacturing jobs are concentrated in blue-collar categories • erosion in the average wage of manufacturing workers relative to service workers contradicts the common assumption that any manufacturing job is, by definition, a good job. Manufacturing employment declines are not direct consequences of high productivity growth and innovation, but rather because of changes in production technology.

12. Change in Corporate Structure • At every stage of modern economic history, aggressive companies have energized the growth process by organizing to exploit production efficiencies inherent in new technology. • The organization that a century ago best exploited advances in mechanical technology (e.g., steam power, direct reduction of metals) was typically large, hierarchically organized, and capital-intense. • In recent decades, however, dramatic changes—especially the intensification of global competition and epochal advances in information technology—have begun to favor organizations that are smaller, flatter, and more flexible than their predecessors.

13. Evidence of the new era On average: • manufacturing establishments are smaller than they were ten years ago • decline in the relative importance of white collar manufacturing employment since 1990 suggests that they are also flatter—that companies are dismantling management hierarchies originally built to process, verify, and distribute information • evidence suggests that the information revolution has spawned new systems of networked production in which small specialized firms use shared information to coordinate their activities, simulating the performance of much larger integrated companies Such networks have the potential to transform the character of business competition from a contest of scale-driven broadly-focused bureaucracies to: …a contest of highly specialized firms that create value by leveraging world class skills into commanding positions in precisely defined intermediate and final markets…

14. Importance of a Strong Domestic Manufacturing Base Does the benefit of goods production to any nation’s economy is diminished when the production happens off shore? • Why promote a strong domestic manufacturing base? Two compelling common-sense answers to this question: • A strong domestic manufacturing base is essential to balanced trade – the retention of intellectual value poses huge difficulty and current crises bottom out in intangible value • Manufacturing industries are geographically linked to high-value added services.

15. Where is the Innovation really? Confusion on this question has led our institutions, public and private, to advocate increased investment in “innovation” and decreased investment in “manufacturing”. A ‘ flat world’ does provide for the instantaneous, global proliferation of information but not for its creation. Also a large part of problems and obstacles to moving innovation into the economy are those posed by the manufacturing process itself, e.g., the innovation needed for the deployment of plastics in automotive was NOT their invention but rather the new manufacturing process needed accommodate them.

16. The ‘Dinosaur Machine’ – Barriers to Change • Innovation • Deploy new technology (manufacturing industry) • Provide standardized training/degrees • Protect jobs through certification The net effect of non-adaptive approach to training is the need for ‘re-training’ – a clear euphemism for the lack of preparation for change. Solution: holistic view of the relationship between government-education/industry as co-managers of the innovation/technology lifecycle.

17. MIT President’s recent comments… “When you’re manufacturing anything, even if the work is done by robots and machines, there’s an incredible value chain involved,” Susan Hockfield, the president of M.I.T., says. “Manufacturing is simply this huge engine of job creation.” For batteries, that value chain would include scientists researching improved materials to companies mining ores for metals; contractors building machines for factory work; and designers, engineers and machine operators doing the actual plant work. By some estimates, manufacturing employs about 65 percent of America’s scientists and engineers. Hockfield recently assembled a commission at M.I.T. to investigate the state of American manufacturing and to offer a plan for its future. “It has been estimated that we need to create 17 to 20 million jobs in the coming decade to recover from the current downturn and meet upcoming job needs, …It’s very hard to imagine where those jobs are going to come from unless we seriously get busy reinventing manufacturing.”

18. Case Study: SMART Products

19. Case Study: Structural Changes for SMART Products Future Functional Model FutureFunctional description • Released Software Management • SW binaries and lifecycle management • SW deliveries management from suppliers. • SW distribution management through the whole Entities of the Company. Phase I R&D R&D DOORS PSI Test Results SW Specs • Requirements and Test Management • Requirements traceability shared with the suppliers; • Test results traceability • Bugs workflow management • Dependencies management between HW and SW versions, requirements, test results , bugs and workbenches. SW Specs Bench contest Bug Reports SW binary HW info • Structure Management • ECU structures management (HW and SW components) • Components usage defined by configuration rules • Dependencies and compatibilities management between ECU components. • Alignment of structures with CODEP R&D Supplier Bug Reports ECU Structures SW binary ECUs HW SW Info CODEP HW info • VIN Traceability • Check and controlbetween HW and SW versionsusedforeach ECU • HW and SW versionTraceabilityforall the VIN produced • SW and HW versions update traceability in AfterSales Phase II&III VIN Traceability Programming Manufacturing AfterSales Quality • ECU Programming • ECU programming in Plant • ECU Programming in AfterSales ESLM Program LogicalFlows