Solving Our Competitive Problems

By R. Keith Mobley, Principal SME, Life Cycle Engineering

Recently I rediscovered a passion that has been dormant for too long—I returned to the classroom to lead a group of business leaders through a year-long workshop that will prepare them to lead their companies on the journey to excellence. I had forgotten just how much helping others really means to me. Now that this passion has been rekindled, more of my time will be allocated to the classroom.

One thing that occurred in the opening workshop is worth sharing with you. We used a recent MIT study, “Made in America: Regaining the Competitive Edge”, to set the stage for discussing the challenges that we all face in today’s global economy. The study defines six of the more serious deficiencies that limit our ability to compete and then five imperatives that we must address to regain a competitive edge. The workshop participants, 16 senior and mid-level managers from a cross-section of industries, acknowledged the validity of the study results and we enjoyed a lively discussion of our options to overcome them.

After the first day, several of my colleagues, who had audited the course, suggested that we might want to use a more upbeat study—perhaps a success story—in future workshops because the MIT article is just too depressing. Perhaps it’s just me—I have been accused of being weird for years—but the MIT article is far from being depressing. While it does present a dark picture of our less than desirable current position, it also points out the five imperatives—the five tasks—that we must achieve to regain our ability to compete. In my view, the article is uplifting in that it provides a path that will overcome our limitations and once again permit us to be competitive in the global marketplace.

The MIT study points to six limitations that prevent us from being competitive:

Outdated strategies: We have been much too slow to recognize the change in the marketplace. We did not adapt from a mass producer of consumer goods for a predominately domestic market to a global market that relies on manufacturing flexibility and effective value-stream management.

Short time horizons: American industry is too focused upon short-term profits and has failed to invest in long-term production expansion and modernization. In part, this failure has been driven by our societal need for quick solutions and instant gratification.

Technology limitations: While we may still lead in some fields of basic research, we have failed to apply new technologies to industry. In part, our failure in this area is tied to our short-term horizons and perceived need to maximize short-term profit.

Neglect of human resources: Deficiencies in our education systems and the lack of effective on-the-job training have created a technology and skills gap that seriously limits our ability to compete with the new global workforce. Our failure in this area goes much further. We have forgotten that the workforce—not the physical assets that comprise our factories and plants—is the factor that will determine our long-term survival. We can buy state-of-the-art production assets, invest in the latest technologies and shift to a long-term view of profitability, but without an educated, motivated and involved workforce we will fail.

Failures of cooperation: A fundamental lack of cooperation and communication between individuals and groups within firms and across the supply chain has directly impacted our effectiveness. We all joke about the adversarial relationship between plant functions, such as maintenance and production and fail to recognize just how much impact this lack of cooperation and coordination has on our ability to compete and win market share. Recently, I visited an operation that not only had vertical silos (functions) that would not communicate—at any level—with other silos but would not do so within the silos. Everyone held information close and refused to share even the simplest data with others. Is it any surprise that this operation is losing tens of millions each year?

Government and industry at cross-purposes: The report cited the kinds of government intervention—rather than the amount of it—that have hurt productivity. We are the most regulated country in the world and these restrictions do adversely affect our ability to be competitive in the global market.

No one can disagree with the deficiencies identified by the study. They should be obvious to anyone who can look inward and dispassionately evaluate their company’s current state. Is it depressing? Yes. Should we throw up our hands in defeat? What do you think?

The study countered these deficiencies with five imperatives that would at least begin the journey back to our once premier position as the global manufacturing leader. Like the deficiencies, these recommendations are clear and achievable.

New manufacturing fundamentals: If we want to regain our ability to compete, we must rethink and change the way we evaluate and manage our operations. The focus must shift from short-term, solely financial performance to long-term survivability and profitability. Short-term profits may well suffer, but we must build a strong foundation by investing in the future. This shift in culture will not be easy. It has become so deeply ingrained into the corporate psyche that change will take time—perhaps too much time.

New economic citizenship: We must increase the technological competence of our workforce—at all levels. We cannot count on short-term solutions to the failures in our education system; we must invest in direct training of our existing workforce and establish viable means to grow our future workforces. Teaming with community colleges, technical schools and creation of in-house training capabilities is no longer optional—it is a fundamental requirement for survival.

Blend cooperation and individualism: Elimination of variability in the way that we identify, plan, manage and execute the myriad of activities required by a best-in-class operation is essential; but survival also depends on innovation and continuous improvement. Successful companies must develop a culture that balances the need for standardization and the individualism needed to drive innovation and improvement. This must include replacing functional silos with a fully integrated operation where all share a single vision and work seamlessly together to accomplish a common goal.

Adapt to the global economy: We must become more aware of the diversity in world cultures and become much more involved in the global economy. This includes shopping internationally for technology, materials and innovative industrial practices.

Provide for the future: Educational reform must create a more technically literate and culturally tolerant workforce. Industry must take the lead in lobbying and supporting these reforms to assure that we have a workforce that is capable of competing with those in the global market.

Depressing? I do not think so. The study would be depressing only if there were no solution and that is definitely not the case. With the possible exception of the last imperative, all of these are well within our capability as company leaders to accomplish. In fact, if one looks closely at the MIT recommendations, these imperatives are common to the reliability and operational excellence model. They are changes that all best-in-class operations have already implemented; they are proven to be achievable. So in closing this letter, my response to my colleagues is that not only is the MIT study not depressing, it is or should be an uplifting, encouraging roadmap to the future in which we reclaim a leadership position in the global market.

 

Thank you for taking the time to read this month’s letter. Hopefully, it has raised a few thoughts that will help you take the next step in your journey to excellence. I welcome your feedback and am happy to respond to specific questions. You can reach me at [email protected].

Best regards,

R. Keith Mobley
Principal, Life Cycle Engineering, Inc.

MOBLEY'S SIXTH LAW:
"The first step toward solving a problem is to acknowledge you have one."

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Keith Mobley has earned an international reputation as one of the premier consultants in the fields of plant performance optimization, reliability engineering, predictive maintenance, and effective management. He has more than 35 years of direct experience in corporate management, process design and troubleshooting. For the past 16 years, he has helped hundreds of clients worldwide achieve and sustain world-class performance. Keith can be reached at [email protected].

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