The Boeing debacle: Seven lessons every CEO must learn

This article by Steve Denning published by Forbes is doing the rounds at present. It's highlighting the mechanical problems faced by the 787s that is costing Boeing more money on a project that was already over budget. But it's not specifically a Boeing bashing piece.

It highlights the 787 project as one example as part of the broader issue of offshoring.

1. Use the right metrics to evaluate offshoring
2. Review whether earlier outsourcing decisions made sense
3. Don't outsource mission-critical components
4. Bring some manufacturing back
5. Adequately assess the risk factors of off-shoring
6. Adequately value the role of innovation
7. Get to the root of the problem: maximising shareholder value

You can read the whole article here and while I believe it provides a good rationale for approaching the question of offshoring for enterprises, it also provides some good foundations for an industry policy.

Why manufacturing matters - the difficulty in disconnecting

Tim Mazzarol blogs on The Conversation about some of the reasons why manufacturing matters. He reasons that it is almost impossible to disconnect manufacturing from its flow-on benefits to other sectors in terms of innovation and productivity specifically, but this doesn't mean propping up unsustainable industries either.

Both government and industry have a role to play to ensure we don't lose manufacturing as a key enabler for economic growth and become too reliant on a finite mining boom. He also refers to the US commitment to rebuild their manufacturing industry and the reports that underlie the movement. It's quite a good read.

Click here to read the full story.

Powering up the manufacturing engine room

In my spectacularly unsuccessful rugby days, I had the dubious privilege of playing 'Hooker'. This must conjure up some colourful images for my US friends, but I assure you the hooker position is an important and respectable one. In Rugby, as opposed to Rugby League, the hooker is charged with the task of winning scrums (by hooking the ball), throwing the ball for line-outs and should be fit enough (not me) to be present when contesting the ball in all rucks or mauls. The Hooker is one of three players in the front row of a scrum, which my coach used to call the 'engine room' of the game.

This is apt because those of us in the engine room were not particular known for our good looks or flamboyance, but were the essential cogs in the team's machinery that provided the force and power to enable the other team members to score the points. Post-game there are always half-serious jibes between the forwards (the workhorses) and the backs (the glamour boys).

I recently heard the engine room analogy used to describe manufacturing and it is an apt one. Manufacturing provides the process - the grunt work - for industry such as mining, resources, construction and infrastructure - enabling them to deliver value and boost the ceonomy as a result. Value, in this case, is more than product. It is delivering value in its broadest sense in terms of product and service (maintenance), but also in terms of R&D, innovation, process improvement and job multiplier effects.

Like any engine room, manufacturing needs to have the muscle and intelligence behind it to move forward. Our muscle and intelligence can be built if we address the following (as mentioned in a previous post):

• the business case for manufacturing
• the elements impeding the career path
• sector prioritisation

If we get these things right, the engine room will continue to move us forward. If the engine room slows down, so does everything else.

Advancing manufacturing

by Jim Walker, CEO - QMI Solutions

QMI Solutions has a history of aligning itself with world leaders and experts on manufacturing. This is how we are able to transfer proven practices and technology for the benefit of local industry - the primary reason for the establishment of QMI Solutions.

Most recently, we have been fortunate enough to work with Professor Goran Roos, a leading thinker on manufacturing and a world-renown academic and strategic advisor to industry around the world. It was great to see Professor Roos as one of our keynote speakers on “The future of Australian Manufacturing” at our Manufacturing Skills Conference held in May.

 

In 2008, Australia moved from being a low cost environment to a high cost environment and is ranked the third most expensive country in which to conduct business. Professor Roos says because the shift to a high cost environment has occurred relatively quickly, many support businesses and systems have not been able to make the change required to compete successfully.

 

Compounding this, over the past decade, Australia has experienced a flattening trend in productivity. Although the Australian economy has experienced average annual GDP growth rates ahead of many other developed economies, ours dropped over the past decade and is only now showing signs of relative improvement. Sometime around 2002, Australian productivity went from growing substantially faster to growing substantially slower than the OECD average. Added to this, Australia’s innovation performance over the past eight years slipped from 5th to 15th according to the World Economic Forum’s Global Competitiveness Index.

 

Click here to read the full article.

Advancing Australian manufacturing

Attached is an article by Craig Milne, Executive Director of the Productivity Council of Australia, that gives a potted history of manufacturing in Australia and the associated problems it has faced over time. He also attributes the negative effect economic reform has had on the industry, however my favourite part is this:

"There are strong arguments for Australia staying in manufacturing, and being prepared to pay a high price to do so. Manufacturing is the sector that contains and advances the skills and capabilities that prescribe membership in the ranks of the advanced nations of the world. For research and innovation, manufacturing provides the essential ground from which future streams of products and incomes can emerge. Whatever form the economy of the future may take; manufacturing will provide the enabling foundation for it."

Click here to read the whole article.

Today's jobs are manufacturing jobs

A study published by the National Association of Manufacturers and the Manufacturing Institute, titled “Keeping America Competitive” states that “today’s manufacturing jobs are technology jobs, and employees at all levels must have the wider range of skills required to respond to the demands of an increasingly complex environment.”

However, the US identifies a number of obstacles in employing more in manufacturing:

1. Manufacturing’s image
2. Parents
3. Teachers and counselors
4. Shop classes
5. Vocational Training
6. Advanced Technical Training

Click here to read the full article.

Manufacturing and innovation - tied together

Detroit is synonymous with the US auto industry and as such, experienced the worst of the industry's downturn over the past 30 years. So you may be excused for thinking an article on manufacturing from The Detroit News may carry baggage, but the author Mark Benvenuto uses the past troubles as a good example of the importance of an intrinsic link between innovation and manufacturing.

The most salient point for me was the theory that didn't work - namely the practice of shipping production overseas, whil hoping to retain the idea factories locally.

"To believe that is to misunderstand something fundamental: many of the most valuable innovations happen close to production, where scientists, engineers and researchers have tangible problems before them to solve."

He also mentions an admirable initiative from the American Chemical Society, which is awarding chemical scholarships to encourage innovation and job creation in the chemical sciences.

There are plenty of lessons we can learn from Detroit.

Click here to read the full article.

Mature aged workers - an unrealised resource?

An article from the AMMA - the Australian Mines and Metals Association ran a discussion on mature age workers on LinkedIn. Our MSQ General Manager Erik Salonen replied with the following points, which were then used on the AMMA site. Here is the article.

Last week The Australian ran an article about the economic benefits of having older people in the workforce. While Australia struggles with a skills shortage, many other countries are tapping into a particularly rich vein of talent, the over 50 market.

Erik Salonen, General Manager at Manufacturing Skills Queensland, wasn’t one bit surprised at the report. He believes mature aged workers play an important part of any organization, particularly because of the vast amount of intellectual property they take with them when they leave.

Flexible work options

Mr. Salonen advises a key method of attracting and retaining mature age workers is providing flexible work options to accommodate caring responsibilities, health issues or a desire for a different work/life balance. Mature age employees can often be encouraged to stay on when offered:

• phased retirement
• part-time work
• job sharing opportunities
• work from home arrangements

"In particular, phased retirement enables mature age employees to continue to participate in the workplace, allowing employers to retain employees - and their skills and knowledge - for longer than they would otherwise."

“Many options are available for phased retirement, depending on the needs of employees, as well as business and operational requirements.”

Options for Phased Retirement

Mr Salonen shares the following options employers can provide to mature age employees:

• Transition from full-time to part-time work in their current job
• Take alternative job opportunities on either a full-time or part-time basis
• ‘Retire’ from the organisation and contract back
• Work full-time with additional flexible leave and flexible hours entitlements

Business benefits of phased retirement

• Retention of skilled employees in the workforce for a longer period of time
• Preservation of organisational and/ or corporate knowledge
• Provision of a system for effective succession management
• Creation of a flexible and responsive workforce
• Increased return on investment in training and development

Help for mature age workers

Employers are being encouraged to hire and train older workers under a Department of Education, Employment and Workplace Relations (DEEWR) government scheme called Experience +. Over the next three years, 7500 workers aged 50 years and over with trade relevant skills but no formal qualifications will have the opportunity to have their skills assessed and formally recognised. Assistance is available for workers needing an apprenticeships or traineeships. Industries given priority include Construction, Manufacturing, Electricity, Gas, Water and Waste Services. These grants are also available for small business owners.

For more information, check out:

• Experience +
• More Help for Mature Age Workers

It’s all good news for older workers looking for jobs in mining, energy jobs or oil and gas jobs. As the global resource industry feels pressure to find skilled workers, the biggest source may well be the people who have powered the economy for the past 40 years.

What is your experience with mature age workers?

Click here to see the webpage or comment below.

Advertising the importance of manufacturing

I quite like this advertisement currently doing the rounds on Australian TV. To me, it's all about the importance of manufacturing: http://www.youtube.com/watch?v=IiDE2PvLWe4