What’s the difference between Smart & Digital Manufacturing?

January 31st, 2015 - Posted by Smart ManufacturingSmart Manufacturing to Uncategorized

They sound quite similar.  Digital manufacturing is about an industrial internet of smart, connected products.  Smart manufacturing is about the industrial internet of smart, connected factories and production plants.

Still confused?  Take a look at this presentation (click thumbnails to enlarge)

It describes the new Digital Manufacturing and Design Innovation Institute that broke ground in Chicago last October with $320 million in private and public funding.

It also explains why in December, President Obama then announced a U.S. Dept. of Energy-led competition to establish a separate Smart Manufacturing Institute in America that will probably be funded with at least $250 million in private and public money.

The real twist will be if a Midwest team also wins the Smart Manufacturing Institute competition and locates that hub at a new Energy Innovation Center in Milwaukee, Wisconsin – just 90 miles away.

Actually, maybe that’s a good thing, because then they could work together – since Smart Manufacturing still seems a lot like Digital Manufacturing.  Or maybe it’s just me.  That would just be too logical or “Smart.”



President Obama Calls For Smart Manufacturing

November 7th, 2012 - Posted by Smart ManufacturingSmart Manufacturing to Uncategorized

President Obama said the nation should create “a Smart Manufacturing infrastructure and approaches that let operators make real-time use of ‘big data’ flows from fully-instrumented plants in order to improve productivity, optimize supply chains, and improve energy, water, and materials use,” when he proposed a National Network of Manufacturing Innovation institutes on March 9, 2012.   

Now that he’s won re-election, President Obama can hopefully establish strong U.S. industrial policies to accelerate the huge business investments necessary to modernize the world’s oldest industrial base and finally unleash the pent-up potential of a 21st Century Smart Manufacturing revolution. This has been too long overdue.  Ten years ago, a bi-partisan Congress passed the U.S. Manufacturing Enterprise Integration Act of 2002 which authorized a $150 million three-year program for the National Institute of Standards & Technology to develop the foundations for a Smart Manufacturing infrastructure and approaches. However, then-President Bush refused to fund it! 

 President Obama talked about manufacturing continually on the campaign trail. As he has during his first term in office, he made a point of highlighting manufacturing’s integral role in our economy.  His administration’s leadership in fast-tracking programs that support Smart Manufacturing technology breakthroughs are the critical next steps to increase U.S. manufacturing competitiveness. 

“Investing in technology, equipment and automation” is the #1 way that U.S. manufacturers say they can increase competitiveness – when Michael Porter’s surveyed all Harvard Business School graduates and asked that open-ended question in his “Prosperity at Risk” report.  While many manufacturers have historically asked federal policy makers in Washington DC to “level the playing field” by lowering taxes, regulatory, health care and other costs, most U.S. companies have taken matters into their own hands and stayed competitive by continuously improving productivity to overcome the higher costs of doing manufacturing in America. 

The last time America faced a manufacturing crisis similar to the one today was in the 1980’s, when competition from Japan revealed quality problems and inefficiency in U.S. firms that had accumulated during a generation of post-war dominance.  Then, American leaders from policy, business, labor, and academia engaged in a vigorous debate, came to a shared understanding of the challenges, and pursued a set of public policies and private practices that started the Quality Movement such as the U.S. Malcolm Baldridge Award.  The Quality Movement boosted U.S. productivity and laid the groundwork for two decades of prosperity.

For two decades, manufacturers repeatedly executed lean, Six Sigma, Kaizan and other cost reduction strategies that successfully streamlined operations and reduced waste.  U.S. Manufacturing has been one of the world’s best productivity success stories.  However, those strategies are now reaching the law of diminishing returns.   Federal funding for the Baldridge award was even eliminated this year. 

Investments in technology, equipment and automation are the next logical step for U.S. manufacturers to improve productivity and stay competitive.  As the IT revolution hits modern factory floors, the next generation of 21st Century Smart Manufacturing will cause the equivalent of the Quality Movement and much more.  Not only will it yield a new era of greater industrial productivity and global competitiveness, but these flexible factories of the future will be safer, cleaner, and more energy efficient.  Similar to President Reagan’s leadership role in the Quality movement of the 1980’s, President Obama can be the nation’s leader in starting a 21st Century Smart Manufacturing movement.

The Journey Towards SMART: The Changing Face of Manufacturing

June 11th, 2012 - Posted by Smart ManufacturingSmart Manufacturing to Uncategorized

By Lance Fountaine – Manager, GPP Manufacturing Solutions


The world of manufacturing is changing… 

I was never very interested in owning a GPS system.  As a kid growing up in the ‘70s and ‘80s, we were taught to read maps and make the necessary decisions based on the current version of static information.  Over time the information source would evolve and we either relied on outdated information or bought a new map.  Like many others, however, I was good with maps and gained a sense of pride in getting there the first time without making a wrong turn and beating the rest of the crowd.

Of all people to change my perspective, it was my technology challenged father.  While traveling in Florida, he showed me his new GPS unit.  I knew of the mapping functionality, but I had never been exposed to the new satellite feedback capabilities.  The device not only had access to accurate, up to date maps and travel information, but also had real time traffic and construction feedback capability.  Needless to say, he beat me to our destination.  This was certain to change my mind set.

 In today’s world of information, historical and real time data is prevalent in so much of what we take for granted in our daily lives.  We find it in airports, on our cell phones, in our banks, and in many other applications; and its breadth of use continues to grow.  These are ‘SMART’ concepts.  Although today many consider these concepts only a luxury of technology, tomorrow the world will start to consider them an expectation that is essential for improvements in process performance and capability.

 ‘SMART’ in Manufacturing:

So what about the world of manufacturing?  The challenges to stay competitive as a manufacturer are never ending.  It started with the labor market and the perceived cost advantages of offshore resourcing.  In more recent years, the challenges to long term manufacturing sustainability have expanded to include environmental and financial regulations, raw material supply chains and energy constraints.  Now, more than ever, improvements in process optimization and manufacturing performance are essential for competitive advantage in the marketplace.

So what exactly is ‘SMART Manufacturing’?  In an attempt to provide a short and concise definition, it is the integration of data with process expertise to enable proactive and intelligent manufacturing decisions in dynamic environments.  The concept is not completely new as there have been pockets of success in many industries.  This is probably most notable in electrical power distribution where the ‘SmartGrid’ concept is continuing to evolve into a comprehensive strategy for supply and demand.  The lesson to be learned is how to apply this same concept to the optimization of production and the management of the manufacturing supply chain.

The successful adoption of ‘Smart Manufacturing’ requires three critical components; Technology, People and a well defined Operating System.

 The Technology of ‘Smart Manufacturing’:

Nearly every modern manufacturing facility has some level of process control and shop floor functionality implemented within the location.  The gaps in current capability are not the result of a lack of measurement or control, but instead related to a limited understanding of process history, interdependencies and common definition.  Without the ability to correlate data and model performance, efforts to continuously improve the overall process are not reaching their full potential.

It is the integration of the existing instrumentation, process control and shop floor systems that is the key technology enabler for the successful implementation of ‘Smart Manufacturing’.  This integration goes well beyond just simple communication between devices, and instead hinges on a comprehensive enterprise and facility data model.  This data model stores historical performance, documents relationships and correlations, and facilitates common information rollup and aggregation.  It is also a model that can easily be adapted to accommodate both location and enterprise information needs.  Figure 1 shows the detailed architecture of the ‘Smart Manufacturing’ environment.

Technology can also be introduced to improve information consumption through the use of wireless networks, portable devices and visualization tools.  These types of solutions can help ensure that the right information is provided to the right people at the right time.









Figure 1:  The ‘Smart Manufacturing’ Architecture

For more detail on the technical architecture, please see the Appendix: ‘Smart Manufacturing’ Solution Design.

 ‘Smart Manufacturing’ Success through People:

Technology by itself cannot resolve all of the ongoing challenges of a manufacturer.  As in any business, the success of manufacturing also relies heavily on its people.  Over time the human resource requirements may change, but it is still fundamental that people drive the successes.  As automation, process control and information technology have helped to modernize and evolve manufacturing processes, it is still the human asset that innovates and helps make the next process step change. 

Unfortunately, innovation is too often thought of as only a breakthrough in technology.  Most innovation, however, truly consists of small process improvements which, if implemented properly, will be locked in for improved efficiency and/or quality. 

‘Smart Manufacturing’ provides users with a common toolset for collective innovation.  The environment is designed to be used by all levels of the organization including operators, supervisors, process engineers, department managers and even executive leadership.  With the ability of strong employee engagement, there will almost certainly be an increase in process innovation.  Personal validation through recognized contribution is one of the most powerful drivers for success in any business.

Besides the significant benefits that will be realized through collective innovation, there are also several other secondary people advantages that can be realized through ‘Smart Manufacturing’.  With a common and well defined information environment, the organization will be better equipped to handle employee attrition and training.  In addition, the standard environment will also allow for stronger collaboration among sites, especially across those locations that utilize similar process technologies. 

Finally, adopting ‘Smart Manufacturing’ will eliminate some of the non value added work that is so prevalent today on the manufacturing shop floor.  With good vision, strong solution design and continuous improvement, much of the manual data entry and paper routing can be eliminated or significantly reduced.  This will allow the workforce to dedicate more time to productive operations or value added work activities.

 ‘Smart Manufacturing’ Enabling the Business Operating System:

As we outline the technology and people benefits associated with ‘Smart Manufacturing’, it is equally important to recognize its value as a key enabler in expanding the capability of the plant operating system.  To completely embrace the concept, manufacturing organizations will need to initiate a change in mindset.  

Maybe the most substantial benefit of the ‘Smart Manufacturing’ program is its ability to improve the measurement system.  By having real time trends available online, operators and process control systems will have improved capability to make near real time decisions to better manage the process.  This process optimization will reduce the number excursions, improve operational efficiency and provide better quality.  In any plant operating system, measurement is one of the key components for success.  Figure 2 shows an example of a real time operator suggested action to better manage the peak use of auxiliary energy at a manufacturing facility.







Figure 2:  A real time operator suggested action to better manage the peak use of auxiliary energy at a manufacturing facility

A second benefit that can be realized in an operating system that is enabled with ‘Smart Manufacturing’ is the automation of KPI calculation, reporting and root cause analysis.  In nearly every enterprise business there is strong interest in developing common KPI metrics for performance analysis and power of comparison.  Without ‘Smart Manufacturing’, much of this data is manually collected, calculated and reported.  There is heavy reliance on people in a process that is prone to error and plagued with many inconsistencies.  In addition, there is often little or no ability to drill down to contributing factors as a means of root cause analysis.  This often results in time consuming and high cost speculation by one or more groups of experts.  ‘Smart Manufacturing’ helps reduce the costs of KPI calculation and reporting, and facilitates any related problem solving activities.  Figure 3 shows an example of the presentation of automated daily KPI with drill down to real time.








Figure 4:  Real Time Data Accessed through Drill Down from Monthly Dashboard

Finally, a third operating system benefit that can be realized with the deployment of ‘Smart Manufacturing’ is the ability to adopt and rapidly transfer ‘best practice’ innovations across the enterprise.  Within the ‘Smart Manufacturing’ environment, it is very important to segregate ad-hoc development and experimentation from established enterprise standards.  While it is critical for employees from all levels of the organization to innovate, the enterprise must recognize and approve ‘best practices’ standards.  Once adopted, these standards will be propagated across the entire enterprise to quickly leverage the associated benefits to all operating locations.  Figure 5 shows an example of a ‘best practice’ development that can be rapidly transferred across multiple operating locations.







Figure 5:  An Example of ‘Best Practice’ Development for Transfer


Adopting ‘Smart’ concepts in manufacturing can become a key competitive differentiator in efforts to overcome the many challenges facing today’s businesses.  By leveraging technology and enabling people within their plant operating system, manufacturers can better leverage innovation and ‘best practices’ to help lower costs, optimize the process and improve product quality.

 The world of manufacturing is changing…and ‘Smart Manufacturing’ will be a key initiative to help drive future success.

 Appendix: The ‘SMART Manufacturing’ Solution Design:

The purpose of this appendix is to highlight the technical design aspects that need consideration in the development of a comprehensive ‘Smart Manufacturing’ environment.

Please reference the architecture drawing included as Figure 1.  There are four primary technical components that need to be included in the ‘Smart Manufacturing’ design.  They are as follows:


  1. Process Data Collection and Storage (Historian)
  2. Common Manufacturing Execution (MES)
  3. Manufacturing and Business Intelligence (MI / BI)
  4. Integrated Data Model

 Each of these technical components needs to be given independent consideration based on the specific nature and current condition of your manufacturing enterprise or location.  These considerations will be outlined in detail below.

Process Data Collection and Storage (Historian):

The purpose of a historian is to collect detailed process data and store it into a time based historical database.  Although there are a number of vendors who provide historian functionality, the two key technical aspects to consider when selecting a solution are its network connection capabilities and ease of data consumption.

The primary level of connectivity is to the process.  This connectivity requires direct linkage to process equipment such as instrumentation, PLCs, HMIs, SCADAs, etc.  The challenge in establishing this connectivity is the significant diversity that often exists in process equipment.  In many enterprises, there are potentially hundreds of different devices that monitor and control the process.  It is critical that the selected historian is able to connect to all of these different devices to enable a comprehensive ‘Smart Manufacturing’ environment. 

A second level of connectivity that is needed for the historian is the linkage to the MES and ERP transactional databases.  This will allow for two way data interfacing between the process and shop floor, and also enable the automatic calculation and population ok KPI and ERP data.

In addition to connectivity, the historian also needs to allow for ease in the consumption of data.  This not only includes the proprietary query and visualization tools that come with the historian product, but also its ability to allow generic integration through standard tools and programming environments.  Because ‘Smart Manufacturing’ needs to be capable of aggregating and analyzing data from many different sources, data access cannot be restricted or limited to only the proprietary toolset.

Common Manufacturing Execution (MES):

Manufacturing Execution Systems (MES) have been recognized for many years as an essential toolset for managing operations on the shop floor.  Although some manufacturers may suggest that they do not have an MES solution, nearly all use some form of people, paper, spreadsheets or applications to manage production from point of order entry to point of finished goods.  These solutions include functions for scheduling, quality management, production reporting, equipment monitoring, etc.  In a ‘Smart Manufacturing’ environment, there should common applications supporting the MES function.

The architecture for MES applications is generally pretty standard.  It consists of a client based application with a relatively standard transactional database backend.  Nearly all MES applications need either significant configuration or development to meet the very specific shop floor needs of the manufacturer.  The most critical design consideration that needs to be addressed is whether to buy a vendor supplied package solution or develop a custom application.  Both approaches have their advantages, but the decision should really be based on the availability of a comprehensive solution that truly meets your needs.  If your processes are fairly unique, sometimes the configuration of a packaged solution can be more difficult, costly, and less effective than a custom solution.  In many cases, a hybrid model is the best solution.  This approach utilizes vendor packages for common functions and allows custom development for unique functionality.

Whatever MES solution strategy is adopted, it is essential that there is strong integration with both the historian and ERP databases.  The ‘Smart Manufacturing’ concept relies on the automation of data summary, calculations and transfers.  This minimizes the reliance on people and improves the accuracy and timeliness of reporting.

Manufacturing and Business Intelligence (MI / BI):

The most critical design considerations for establishing a manufacturing and business intelligence strategy are the ability to access multiple data sources and to present this information in a standard, non-proprietary toolset.  The challenge that faces so many businesses today is deciding exactly how to accomplish this objective.  With so many vendors advertising their own proprietary solutions, and a lack of understanding of manufacturing and business data structure, there are often many conflicting and confusing approaches that are being propagated throughout the enterprise.  Two steps need to be taken to overcome this challenge.  First, a generic environment needs to be established for the presentation of dashboards and reports.  Second, there needs to be an increased focus on the development of a comprehensive data model.  We will deal with the second point in our final topic on the Integrated Data Model.

 It is not difficult to design a generic environment for the presentation of dashboards and reports.  There are, however, certain criteria that are essential for success.  First, the functionality should almost certainly be web based and allow access from many different devices including PCs, laptops, thin client, smart phones, etc.  Second, it should also be easy to use (leveraging the data model) and allow end users to develop their own ad-hoc queries and analysis.  Third, and perhaps most important, the environment should allow for the secure segregation of the standard ‘best practice’ dashboards and reports from the individual ad-hoc analytics.  Intelligence is a critical component of ‘Smart Manufacturing’ and the concept cannot be a complete success without recognizing its value and importance to the enterprise.

Integrated Data Model:

The final, and perhaps most important, technical component that is required for a comprehensive ‘Smart Manufacturing’ environment is an integrated data model.  To be clear, the purpose of this model is not to replicate any data.  Instead, it has three primary objectives.  First, it is designed to provide a visual and logical structure with dynamic reference to the source data.  Second, it is modeled to recognize the correlative relationships between many of the established data elements.  And third, it is developed to provide automated information aggregation and rollup capabilities for the critical business KPIs.

The toolsets to design a visual and logical data model are relatively new in the marketplace.  The most fundamental deliverable of the toolset is its ability to define data elements that are capable of dynamically referencing source information from multiple databases.  In most cases, it is recommended to structure these data elements in an asset format.  Each data element can then also be defined as enterprise common, technology common or site specific.  This helps ensure the solution meets the needs of the enterprise as well as those of the location.  The visual and logical data model allows users to more easily locate the data that is needed and to better comprehend the scope of the information that is being consumed.

An added benefit when establishing the visual and logical data structure is the ability to define some level of correlation among the many different data elements.  As a starting point, perhaps the easiest correlation to define is that between the KPIs and the defined assets.  By adding KPI elements to the logical data structure, these initial correlations can be established for further drill down analysis capabilities.

When adding KPI correlation to the data model, it is also important to recognize the ability and benefits of automated data aggregation and rollup.  All KPIs are based on some level of source data.  Although there are certainly examples of manual entered source data, many of these elements are from an online source.  In either scenario, however, it is critical to understand how that source data is calculated or rolled-up into a summary KPI.  In some cases, these KPIs are even calculated and summarized in many different frequencies (i.e., daily, weekly, monthly).  As a result, it is important to establish clear calculation and rollup procedures as part of the data model.  By using an automated calculation process, the solution will ensure consistency and eliminate errors.

It is also very important to recognize that the data model, as all other components of ‘Smart Manufacturing’, is a living part of the environment.  It will never be perfect, and will always be evolving.  New data points and KPIs will be required over time, and changes will have to be effectively controlled to ensure the component maintains its integrity.  A good change management process is certainly an essential requirement for the success of a ‘Smart Manufacturing’ program.

The Third Industrial Revolution?

April 25th, 2012 - Posted by Smart ManufacturingSmart Manufacturing to Uncategorized

I found it amusing to be reading my print edition of The Economist magazine special report about “The Third Industrial Revolution” replacing traditional manufacturing with 3-D printers that make products. Isn’t the information revolution supposed to be replacing traditional printing presses too?

Low cost 3-D printers will certainly extend the power of personal manufacturing to everyone similar to the way desktop publishing extended the power of printing presses to everyone. However, the report misses a much bigger aspect of the third industrial revolution that is happening in highly-automated, IT-driven Smart Manufacturing which will someday make most cars, cell phones and cosmetics for billions of middle class consumers this century.

In trying to understand this shift to the third industrial revolution, Oxford and Stanford Professor Emeritus of Economics Dr. Paul David published a seminal paper in 2000 about the second industrial revolution illuminating lessons learned from “Our Ignorance.” David analyzed the difficulties shifting from steam engines to electric motors – the new general purpose engine essential for modern assembly lines. Ninety-five percent of all factories were still steam engine and leather-belt driven in 1900, two decades after Edison’s first electric power company opened. The first all-electric factory in America didn’t happen until 1920 more than four decades after the first power plant. U.S. total factor productivity (TFP) gains from the second industrial revolution finally began in the mid-1920’s despite Vice Presidents of Electricity – a title in vogue at the time – advocating for the great benefits envisioned from all-electric factories and assembly line production in prominent magazine articles dating back to the turn of the century.

David partly attributes this long delay to the unprofitability of replacing still serviceable steam-engine driven manufacturing plants. However, even knowledgeable contemporary observers of the second industrial revolution failed to grasp its transformational profitability. Similarly today, almost every factory is managed as a “cost center” with plant managers assigned due to their cost reduction expertise. For Smart Manufacturing to transform factories into “profit centers” again by pioneering mass customization strategies, they will require entirely new types of business leaders with a much different mentality and expertise.

These business leaders will drive strategies to grow profits by increasingly letting customers tell the factory what to make instead of vice versa. They’ll execute marketing campaigns promoting the superiority of products produced by automation, machines and robots. Instead of labor relations, they’ll be experts in minimizing the new high-cost WAGES used in production – water, air, gas, electricity, steam and industrial ecology.

Government policies like the AC-DC standards debate also hindered the second industrial revolution shift. Power companies built electrical systems based on AC standards, ideal for the early adopters in homes, stores and offices. But Thomas Edison and many industry leaders argued for a DC standard, necessary for large electric motors to drive assembly lines. Even today, most factories still transform AC to DC power at an added cost burden. Likewise, the World Wide Web is based on IT standards and systems that are not ideal for Smart Manufacturing. A bi-partisan Congress passed the Manufacturing Enterprise Integration Act of 2002 directing the U.S. National Institute of Standards & Technology (NIST) to develop the ideal internet and IT standards for Smart Manufacturing a decade ago, but President Bush’s administration failed to fund it. Although that law has since expired, similar to Smart Grid, industry still needs NIST to establish the fundamental internet and IT standards that are essential for Smart Manufacturing and the third industrial revolution to fully begin here in the U.S.

Biggest shift since Ford’s first assembly lines

January 30th, 2012 - Posted by Smart ManufacturingSmart Manufacturing to Uncategorized

“Smart manufacturing is the first structural shift since Henry Ford launched the economic power of mass production.” Wow!  That’s a monumental statement by the very credible Dean of Northwestern University’s college of engineering, Julio Ottino, who articulates the true magnitude of this transformation in his astute commentary about the coming technology-led boom in the Wall Street Journal today. 

However, for those of us who sometimes wonder why the transformation to Smart Manufacturing hasn’t already started to skyrocket… he confidently closes that “it’s just a matter of when.”

In a meeting with President Obama’s former manufacturing czar Ron Bloom and CTO Aneesch Chopra last year, they tried to suggest its a “market failure.”  They asked “If smart manufacturing is such a smart idea, why aren’t businesses already doing it?” However, Ottino’s points out how hard it is for people — even politicians and business leaders — to see the impact of these huge paradigm shifts.   He takes us back 100 years to explain how true transformations take time — especially in manufacturing. 

In hindsight it seems obvious that emerging technologies circa 1912—electrification, telephony, the dawn of the automobile age, the invention of stainless steel and the radio amplifier—would foster such growth. Yet even knowledgeable contemporary observers failed to grasp their transformational power.”

As the attached brief ppt points out based on a seminal paper by Stanford Economist Paul David – “Lessons Learned From Our Ignorance” — these transformations take time.  The first all-electric factory in America didn’t happen until in 1920 –  an incredible 40 years after Edison started the electrification revolution.  [A.O. Smith in Milwaukee built the first U.S. all-electric factory according to industrial historians.]  If we’re on a similar timeframe, it may be another eight years before we have the first all IT-driven smart manufacturing facility. 

Unless we learn a few lessons from history…

Greatest jobs impact of smart manufacturing

January 13th, 2012 - Posted by Smart ManufacturingSmart Manufacturing to Uncategorized

On Wednesday, President Obama hailed Master Lock Company for returning 100 jobs from China. However, he didn’t mention the important point that MasterLock did it with “heavy investments in automation” to make these workers in Milwaukee cost-competitive with those in China. Advanced automation and Smart Manufacturing technology can offset the advantages of cheap-wage nations.

Obama also missed the opportunity to talk about the bigger jobs impact of Smart Manufacturing. New studies show that for every one job created in a Smart Manufacturing plant, two, three, four or more “indirect” jobs are created outside the plant in companies to service, support and supply it. And these are NOT restaurant jobs from the tickle down economic impact, but high-paying new nonmanufacturing jobs… that will be dependent on MasterLock. Thus, 300 to 400 new jobs will probably be created to service, support and supply the 100 jobs in the expansion of a Smart Manufacturing plant like MasterLock.  Read more…Smart Manufacturing increases indirect jobs.final


Transform manufacturing into a profit center

December 19th, 2011 - Posted by Smart ManufacturingSmart Manufacturing to Uncategorized

Many executives have narrowly looked at manufacturing operations too long, seeing them mainly as cost centers.  Instead, some progressive businesses like Gillette view manufacturing as a competitive advantage that in their case helps them differentiate a commodity like razor blades and enables them to maintain a very premium price. 

An excellent thought piece by Reuters Scott Malone describes the Gillette story and this new trend toward considering the overall sales value of manufacturing decisions.

Gillette’s manufacturing strategy never diverged down the two different roads into the popular movement that physically separated R&D and product engineers from a company’s production centers, often locating half way around the world.  Business leaders assumed that there didn’t need to be any close proximity between innovation centers and the factory floor. Part of their unspoken justification for this popular trend was to break unions and lower high labor costs by relocating plants into nonunion regions with lower labor costs.  A new greenfield plant also allowed efficiency experts to streamline operations without any constraints caused by current operations. 

However, a growing body of business research is now pointing out the fallacies of this strategy.  This started with a milestone Harvard Business Review article by Gary Pisano and Willy Shih about Restoring American Competitiveness.  They show why companies must overhaul the management practices and governance structures that have caused them to make destructive decisions to separate innovation from production. Numerous other studies have followed showing that companies are now migrating their innovation and R&D centers to be closer to manufacturing.

NuCor Steel is another great example of the benefits of keeping innovation and production in close proximity for collaboration.  Despite not having an R&D department, NuCor Steel has a list of technological advances that few can match.  They are best known as the company that pioneered and popularized the mini-mill steel production, energy-efficient electric arc furnaces and thin-slab casting.  How did they achieve innovative manufacturing breakthroughs to become America’s largest steel maker?  Very simple.  New ideas are developed on the factory floor in collaboration between engineers and production workers.  At NuCor Steel, none of the “we-they” elitist mentality exists where smart people develop new products in R&D labs or front offices – and then sent out back or overseas to factories where unskilled laborers do the grunt work and make it.  Innovators and production people work as equals in an egalitarian organization.  In fact, innovators respect them.

Legendary innovators like Thomas Edison respected their benchman and treated them as equals.  Everyone knows his famous quote that Invention is only 2 percent inspiration and 98 percent perspiration.  Edison’s benchmen provided much of that perspiration testing his 999 different ways to make the light bulb.  In essence, he gives them credit that without their perspiration, his inspirations would be worthless.  His Menlo Park center epitomized the importance of keeping innovation and production in close collaboration as the secret to commericialization.

However, at some point during the last century, businesses forgot this secret to success.  They cannot just blame unions because NuCor Steel successfully innovates with unions and German companies famously pioneered production breakthroughs with even company ownership by worker’s councils.  Perhaps we need to understand the root cause about why some businesses look down on production people while highly idealizing inventors.  That attitude may be their Achilles heel.

A New U.S. Industrial Strategy to Maximize Manufacturing Workforce Talent

December 14th, 2011 - Posted by Smart ManufacturingSmart Manufacturing to Uncategorized

The 21st Century workforce in advanced manufacturing will be valued for their knowledge; they will be safer; and more highly educated workers will drive sustainability in both their enterprises and their career paths.

America enjoys a proud tradition of world leadership in the process of doing things better over time. Fueled by bright ideas and a strong value placed on education, productivity gains in agriculture and manufacturing have helped create a very high, durable standard of living. To rise to the challenge of a global manufacturing marketplace driven by productivity and flexibility, and the need to develop workers able to lead in such an environment, our industrial strategy must address three key attributes of workforce development:

• Lifelong Learning;

• Competency-Based, Multi-Media Instruction; and

• Partnerships betweenLearningCentersand Manufacturers.

To prepare workers for the technology-infused, high productivity workplaces of advanced manufacturing, Science, Technology, Engineering and Math (STEM) skills must be a key focus of our nation’s educational system. Employers must invest in job-specific, sustainable training programs to ensure workers can continue to advance with the evolution of new business processes. And, the investment of taxpayer-dollars in workforce development through the Workforce Investment Act and other federal programs must be focused on training to manufacturing skills in demand.

Educational pathways in secondary and post-secondary schools must be aligned to the competencies and skills required in the workplace, using tools like the National Association of Manufacturers (NAM)-endorsed Manufacturing Skills Certification System, resulting in credentials with real value in the workplace. Technology must infuse education as it has the workplace, and job training programs must continually evolve to accommodate emerging needs, such as the need for more workers with Certified Energy Manager credentials.

Finally, more collaboration and partnerships between manufacturers and our educational institutions are critical to the success of both workers and manufacturers nationwide. However, building a smart, safe, sustainable workforce is everyone’s responsibility. The stakes are so high that nothing but a coordinated effort will suffice.

The Manufacturing Institute provides the solutions and services most critical to the American manufacturing workforce. For more information, see our website.    http://www.themanufacturinginstitute.org

Emily Stover DeRocco


The Manufacturing Institute

The Global Competition for Advanced Manufacturing Jobs

December 8th, 2011 - Posted by Smart ManufacturingSmart Manufacturing to Uncategorized

Global competition is becoming a marathon race toward a new age of advanced or “smart” manufacturing. Some developed and even emerging nations have already jumped the gun with strong industrial policies aligning government, businesses and even educational institutions in collaboration. The European Commission invested the equivalent of about $1.5 billion into a “Factories of the Future” public-private partnership more than a year ago in their economic stimulus package.

A traditional manufacturing leader like the United Stateswill not retain its preeminence in the global economy if it loses its robust manufacturing sector. Manufacturing represents 57 percent of U.S. exports today, and produces 21 percent of the world’s industrial output. It supports about one in six private-sector jobs.

But increasingly, Americans invent great products like personal computers or cell phones and then manufacture them elsewhere. To capture the full economic benefits of new technology, we must tie high tech innovation to value-added manufacturing. If we fail to do so — and not do it quickly — centers of innovation will begin to relocate closer to emerging manufacturing centers in China,India,Braziland elsewhere. Developed and emerging nations are in heated competition to create the most compelling opportunities to innovate, build a highly skilled workforce, improve standards of living and enhance national security.

These global competitive challenges demand that we act now. To retain and build its competitive lead in the world, the U.S. must respond boldly to the transformation that is under way in global manufacturing. Manufacturing is and will continue to be an essential path for attracting and maintaining investments, spurring innovation and creating high value jobs.

America must craft and mount a strategic response to provide jobs for its citizens in the 21st century. We need an engaged and skilled workforce, rapid deployment of new-frontier science and technology, deep pools of risk capital, and revitalized physical and virtual infrastructures to drive America’s competitive advantage.

To this end, the Obama Administration has made it a priority to revitalize manufacturing, stimulate job creation and double U.S. exports.

Thus, the Council on Competitiveness with the support of Rockwell Automation and many of our nation’s leading businesses, universities and labor organizations has launched a new U.S. Manufacturing Competitiveness Initiative. The Council’s initiative will support the Administration and U.S. manufacturing in fulfilling these goals by shaping a holistic manufacturing strategy. This strategy was delivered to the Administration and Congress at a National Manufacturing Competitiveness Summit in on December 8, 2011. For a copy of the report, see our website.    http://www.compete.org/about-us/initiatives/manufacturing

Deborah Wince-Smith 

President & CEO

Council on Competitiveness


What is Smart Manufacturing?

December 4th, 2011 - Posted by Smart ManufacturingSmart Manufacturing to Uncategorized

Ten years from now, the global manufacturing sector will look nothing like it does today. Advanced manufacturing technology is rapidly transforming the global competitive landscape. The companies — and nations — that act now to seize its promise will thrive in the 21st century. Those who are devoted to incremental change and fail to engage in smart manufacturing will rapidly fall behind.

Along with 40 other leading companies and universities, Rockwell Automation and UCLA are part of a National Science Foundation initiative to define a road map for the implementation of advanced manufacturing technology — or smart manufacturing — in the United States.

Smart manufacturing marries information, technology and human ingenuity to bring about a rapid revolution in the development and application of manufacturing intelligence to every aspect of business. It will fundamentally change how products are invented, manufactured, shipped and sold. It will improve worker safety and protect the environment by making zero emissions, zero-incident manufacturing possible. It will help keep jobs in this country by keeping manufacturers competitive in the global marketplace despite the substantially higher cost of doing business in the United States.

In the 1980s and ‘90s, manufacturers took steps to address those higher costs by reducing waste and improving their operations through “lean manufacturing” practices. Those efforts, while ongoing, are producing diminishing incremental returns. And businesses cannot cut their way to prosperity — innovation is the path to growth. It is time for a new, bold strategy for U.S. competitiveness that will capitalize on smart manufacturing as a strategic asset for growth.

Investments in a smart manufacturing infrastructure are essential to securing America’s industrial future, and the future economic well-being of our citizens. Smart manufacturing will increase the flexibility of our plants, lower the cost of products and improve environmental sustainability.

It will enable us to development of innovative new products using next-generation materials.

We must act together to make that future a reality. Here are three crucial first steps:

• Invest in public-private partnerships to establish smart manufacturing innovation centers with “test beds” to catalyze and drive breakthroughs.

• Re-balance federal investments in research and development to restore equal funding for applied research at the same level as basic science.

• Prepare the country for the market-altering leaps in manufacturing productivity and efficiency that smart manufacturing will bring about.

We urge you to seize this opportunity for competitive leadership that smart manufacturing can deliver for American industry and workers and for the global marketplace, and to take action to make that opportunity a reality.  For more information, see our website.   https://smart-process-manufacturing.ucla.edu/

 Jim Davis

Vice Provost – Information Technology

University of California–Los Angeles