Global manufacturing rankings over the past 30 years

A great infographic on the movement (or lack thereof) of global manufacturing rankings over the past thirty years.

I know the point of a blog is to offer insights and opinions to readers to digest and discuss, but in this post I'd just like to let a graphic speak for itself, which I've sourced from a great report from the McKinsey Global Institute called "Manufacturing the future: The next era of global growth and innovation". The Report provides a wealth of information on the big global players in manufacturing and how their market share in various sectors has grown or eroded over the past 30 years.

Everyone likes a list with country rankings and below is a graphic from the Report outlining the global rankings of developing economies over the past 30 years. 

For me, a couple of things stood out to me from the 1980-2010 rankings:

US - static

Germany - slight decline

Japan - slight rise and fall

UK - moderate decline

France - moderate decline

Italy - overall static

China - substantial increase

Brazil - moderate increase (but what's with the hiccup in 2000?)

Spain - moderate-significant decline

Canada - recent moderate decline

Australia, Netherlands, Argentina, Turkey, Taiwan - only brief appearances

India - substantial increase

South Korea obviously has made a substantial increase in ranking between 1990-2010, but look at the emergence of Russia and Indonesia in 2010. It will be interesting to see if they have longevity over the next thirty years. I'll come back then and let you know.

White Paper: Capability drivers for Queensland manufacturing

While the impact of the GFC for Australia manufacturers was less severe than first thought, the industry experienced an overall decline as a contribution to Australia’s GDP between 2005-06 and 2009-10 was 0.8%, falling from 9.5% to 8.7%.

The issue of manufacturing competitiveness has reached a seminal turning point for the industry in terms of its ability to remain competitive. Professor Goran Roos, former Thinker in Residence for the South Australian Government and current Chairman of the Advanced Manufacturing Council in Adelaide, in his 2011 Manufacturing into the Future Report, asserts the GFC changed the competitive environment for Australian manufacturing from a low-cost competitive environment to a high-cost one.

As a result, manufacturers need to realign themselves with some of key sources for competitive advantage in this new environment. Roos contends that these come from:

• innovation which is not limited to technology but also includes design and organisational innovation
• repositioning to leverage opportunities in renewable and alternative energy technologies
• unique opportunities to access resource projects and the global supply chain

This White Paper focuses on the third opportunity proposed by Roos – the ability of manufacturers (suppliers) to increase their capability so they are able to better compete for access to resource-related projects. The suppliers examined for this paper are based in Queensland, Australia.

Click here to access the White Paper.

Use Lean to take the waste away

It is still a little surprising to me when I read about companies just discovering the benefits of Lean Manufacturing. The concept has been around for quite some time (it was originally termed "Lean" by the LEI in the late 1980s) and it is even permeating into other sectors such a Health, Finance and Administration. In fact, any business that has a process of some sort (every business?) can benefit from Lean.

In brief, Lean is the reduction of waste in all its forms. And while the traditional Seven Wastes has been expanded to include Eight or Nine Wastes, Lean essentially aims to reduce the following wastes:  

1. Over production
2. Waiting
3. Transportation
4. Inventory
5. Motion
6. Over processing
7. Defective Units

Click here for more details about what these mean and how they negatively affect your business.

Two important things to remember here. Where Lean Manufacturing fails is when companies have approached it as a one-off event - it should be treated as a continuous improvement program and there are tools you can use to ensure Lean is implementable and sustainable in your organisation. Second, it's success should be measured as a cultural change above all else. It is fine to see productivity rise and that's ultimately what everyone wants, but when staff buy into the Lean mentality and it is part of the culture, you know you have been successful and will be in the long term.

The Lean tools I mentioned before are outlined in our ProEdge Manufacturing Excellence program, which has been scheduled for this year - the next one is in Mackay, Queensland on 19th February.

Lean Manufacturing gets results too. Read some of our recent success stories of companies that have implemented Lean well (click on the business name to read the full case study):

Austchrome:

• reduced job turnaround times from 30 to 17 days
• increased production volume by 50%

Before and after Lean at Austchrome

Townsville Pallet and Crate:

• 100% delivery in full, on time

Brisbane Tray Bodys:

• increased productivity by 100%
• increased productivity wins mining client

There is a whole new blog topic where you can relate the principles of Lean to those espoused by sustainability advocates, but for now, just know that Lean works, it's scalable and your competitors are probably already doing it.

Engaged workers make inspired/happy/productive workers

A great article from Innovation Excellence about the three types of workers in any given organisation: Engaged, Not Engaged and Actively Disengaged.

The article details the ramifications of having workers not engaged in the business and happily, a number of strategies to remedy the issue. Of particular use is the infographic see below:

An article well worth reading especially if you're interested in re-engaging your staff. Click here to read the full article.

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.