The National Academy of Engineering (NAE) has pre-released a new report Making Value: Integrating Manufacturing, Design, and Innovation to Thrive in the Changing Global Economy.
The report is the summary of a workshop held this summer on the state of manufacturing. According to the report:
Manufacturing is in a period of dramatic transformation. But in the United States, public and political dialogue is simplistically focused almost entirely on the movement of certain manufacturing jobs overseas to low-wage countries. The true picture is much more complicated, and also more positive, than this dialogue implies.
After years of despair, many observers of US manufacturing are now more optimistic. A recent uptick in manufacturing employment and output in the United States is one factor they cite, but the main reasons for optimism are much more fundamental. Manufacturing is changing in ways that may favor American ingenuity. Rapidly advancing technologies in areas such as biomanufacturing, robotics, smart sensors, cloud-based computing, and nanotechnology have transformed not only the factory floor but also the way products are invented and designed, putting a premium on continual innovation and highly skilled workers. A shift in manufacturing toward smaller runs and custom-designed products is favoring agile and adaptable workplaces, business models, and employees, all of which have become a specialty in the United States. Future manufacturing will involve a global supply web, but the United States has a potentially great advantage because of our tight connections among innovations, design, and manufacturing and also our ability to integrate products and services.
One of the important features of the workshop was its interactive discussion. Unlike many such meetings, only a half a day of the day and a half workshop was devoted to traditional panels. The rest of the time was spend in small group discussions and breakout sessions. As a result, there are a lot of specific insights in the report from the workshop participants. Thus, this short report deserves to be read in full.
Having said that, let me highlight a couple of points I found especially interesting. First was the discussion of the changing nature of manufacturing. This is something that can’t be stressed enough.
I was especially heartened by the workshop’s core emphasis on the linkage between manufacturing, design and innovation. I would add that the discussion also included a focus on the linkage between manufacturing and services — something that the participants apparently interjected into the discussion. As the title of the workshop states, the emphasis was on “making value” not just “making things.” It is the utilization of those things that proves value. And that value comes from both the thing and the service the thing provides. The report used the example of the smartphone — which is only smart because of the services that the apps provide.
Another point emphasized was tight linkage between research & product development and manufacturing. Designing a product and making a product are closely linked – especially in an era of shortening product life cycles. As one participant said, “The new model is that we are all producers, we are all designers.”
This led to a discussion about co-location of research, design and manufacturing facilities. Interestingly, it appears that the participants could not come to a conclusion as to whether the past trend of geographical separation augmented by advanced communications technologies and occasional air travel would be replaced by greater physical co-location. The answer seemed to be, “it depends.”
The participants highlighted four areas for action: human capital, business practices, government services and policies, and infrastructure (including information collection, IP and R&D funding). Under human capital, I was pleased to see the discussion including examples of two leading institutions that have embraced design thinking: Aalto University in Finland. and the Hasso Plattner Institute of Design at Stanford University. And without using the term “design thinking”, the discussion of business practices seemed to touch upon it as a model of the innovation process.
I would also noted that the discussion of government services and policies included the issue of permitting of new facilities and the inconsistency of various government programs. We often overlook how the various programs work together at not only the federal but the state and local level. That would be an area for further investigation.
The preface of the report notes that the workshop was a direct undertaking of the National Academy of Engineering not, as is more common, in response to a government agency request. The preface also indicated that the NAE will be undertaking follow up activities. The NAE is to be commended for its initiative in this area. I look forward to the next installment.