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.