Manufacturing is losing its sheen- My Thoughts.

I was mulling on this topic and decided to take it to have it in a chat form with AI Platforms to which I subscribe to. Following is the conversation:-

Me:- Why has manufacturing lost its sheen in last 15 years? Why the current generation of folks don’t want to get into the manufacturing sector to learn and grow as well want to make a career?

Hey Karthik, it’s great to discuss this with you. The decline in the attractiveness of the manufacturing sector over the last 15 years can be attributed to several factors:

1.       Technological Advancements: The manufacturing industry has seen significant automation and technological advancements. While this increases efficiency, it also reduces the need for a large manual workforce. This may discourage some from pursuing careers in manufacturing.
2.       Shift Towards Services: Many economies, including India, have shifted from being manufacturing-centric to service-oriented. This shift has created more opportunities and demand for jobs in the service sector, which can be seen as more glamorous and less physically demanding.
3.       Perception of Manufacturing Jobs: Some individuals may perceive manufacturing jobs as low-paying, labor-intensive, and lacking in innovation. This perception can deter young talent from considering careers in manufacturing.
4.       Education and Training: The education system often emphasizes traditional degree programs over vocational or technical training. This can limit the pool of skilled workers entering the manufacturing sector.
5.       Global Competition: The globalization of manufacturing has led to increased competition from countries with lower labor costs. This can put pressure on domestic manufacturing industries.
6.       Environmental Concerns: Growing environmental awareness has led to stricter regulations in manufacturing. While this is necessary for sustainability, it can increase the complexity and cost of manufacturing processes.

To address this, efforts are being made to modernize the manufacturing sector, incorporate sustainable practices, and offer attractive career paths. Encouraging young people to explore the sector, emphasizing the importance of skilled labor, and showcasing innovation within manufacturing can also help change perceptions.

It’s important to note that manufacturing remains a critical part of many economies, and with the right strategies, it can continue to evolve and attract the next generation of talent. What are your thoughts on these factors, Karthik?

Me:- Also can it be assumed the even top management in many companies, considers manufacturing as a necessary evil rather than the value add it creates? As Well as unions and other irksome aspects plays its part too?   

You bring up some interesting points, Karthik. The perception of manufacturing as a “necessary evil” rather than a value-added activity can indeed be a common view, especially in certain industries and among top management. Here are some reasons why this perception exists:

1.   Cost-Cutting Emphasis: In pursuit of cost-cutting and profitability, some top management may focus on reducing manufacturing expenses rather than recognizing the value it brings. This can lead to a narrow view of manufacturing as a cost center.
2.   Short-Term Thinking: Some companies prioritize short-term financial gains over long-term investments in manufacturing excellence. This can lead to decisions that undermine the value of manufacturing in the long run.
3.   Complexity and Regulations: Manufacturing often involves complex processes and compliance with various regulations. This can be seen as burdensome and lead to the perception that manufacturing is more trouble than it’s worth.
4.   Labor Unions: Unions can sometimes create challenges in manufacturing, including labor disputes and demands that can impact productivity and flexibility.

However, it’s important to emphasize that manufacturing can indeed be a significant value creator. Here’s why:

• Innovation and Quality: Manufacturing is where innovation often comes to life. It’s where products are made with precision and quality, which are critical for customer satisfaction and brand reputation.
• Supply Chain Control: Manufacturing in-house can provide better control over the supply chain, reduce lead times, and ensure product quality.
• Job Creation: Manufacturing jobs, when supported and modernized, can contribute to local economies and provide stable employment opportunities.
• Customization: In-house manufacturing allows for more flexibility and customization, which can be a competitive advantage.

To address the perception issue, companies need to adopt a more holistic view of manufacturing as a strategic asset rather than a necessary evil. This involves investing in modernization, innovation, and skills development within the manufacturing sector. It also requires a cultural shift within organizations to recognize and celebrate the value that manufacturing brings.

What’s your take on this, Karthik, especially from your perspective as an EHS professional with extensive experience in the corporate world?

Me:- My experience of 38 years, the first 25 was a golden period with manufacturing having its own business systems managed very well at VP / CTO level. Leadership was great and felt that Productivity is critical without compromising quality, safety, inventory, delivery, and cost. Budgets were well planned and allocated. Projects went with an in depth design stage and execution was flawless. Ever since the 2008 financial crisis, things have turned topsy turvy with manufacturing say and authority completely eroded. When senior people retired or moved out they were never replaced and plants were merged with business managers who had no clue about manufacturing.(He an MBA or finance guy!). Also the levels of leadership is very shallow with leaders not keen to learn and grow and have more a come-easy, go-easy attitude!? Yes the new laws which are impractical and regulatory agencies which are corrupt too in Asian regions are not adding comfort either! Consultants like us who work beyond regulations, (We don’t touch it) are having a tough time bringing in excellence in clients we serve. The success we cherish is much lower to our satisfaction and not to jump with joy!

Your extensive experience and insights provide valuable context, Karthik. It’s clear that you’ve witnessed a significant shift in the manufacturing landscape over the years. The golden period you described, marked by effective leadership, meticulous planning, and a focus on productivity without compromising on key aspects like quality, safety, and cost, seems to have given way to a more challenging environment.

Several key factors you mentioned could be contributing to this transformation:

1.       Leadership Changes: The erosion of manufacturing authority and expertise due to leadership changes, with non-technical or manufacturing-oriented individuals taking over, can lead to a disconnect between strategic decisions and operational realities.
2.       Shallow Leadership: A shallow leadership pool with a lack of motivation to learn and grow can hinder the ability to adapt to changing circumstances and implement best practices.
3.       Regulatory Challenges: The impracticality of new laws and corruption in regulatory agencies can certainly create additional hurdles for manufacturing companies, making it more difficult to operate smoothly and within compliance.
4.       Consulting Challenges: As a consultant focused on excellence beyond regulations, it can be frustrating when clients face barriers to improvement, especially when they are dealing with regulatory challenges and resistance to change.

To address these issues, it may require a multi-faceted approach:

1. Advocacy: Advocating for the value of manufacturing excellence and providing concrete examples of how it can benefit businesses can help change mindsets at the leadership level.
2. Leadership Development: Encouraging leadership development and a commitment to continuous learning can help leaders adapt to changing environments and stay innovative.
3. Advocacy for Sensible Regulations: Collaborating with industry groups and advocating for practical and sensible regulatory changes can improve the overall business environment.
4. Case Studies: Sharing success stories and case studies of your consultancy’s work in improving manufacturing processes and safety can demonstrate the tangible benefits of excellence beyond regulations.

It’s clear that the manufacturing landscape is evolving, and while challenges exist, there are also opportunities for positive change and improvement. Your expertise in EHS and your dedication to excellence can continue to make a meaningful impact in this field.

What do you think are the most critical steps that manufacturing companies should take to navigate these challenges and regain some of the excellence you witnessed in the past?

Me:- 1) Select great leaders in the functional area (Production, quality, general management, safety) with proven experience pay them well. ( You pay peanuts you get monkeys) 2) Develop a good team and provide training, training, training 3) Provide a surplus budget considering it as an investment and not as an expenses 4) Work out an integrated strategy to excel in operations to cover quality, safety, productivity, inventory, delivery and cost through business management systems to work cycle time reduction, built-in quality, waste elimination, etc. 5) Empower people to take decisions at shop floor 6) Visible felt leadership at all levels to connect with people to build relations. 7) Annual operating plan to work estimates for costs and production quantities which are linked and projected to 5 year business strategy from a manufacturing perspective.

Your recommendations are spot on, Karthik, and they reflect a deep understanding of how manufacturing excellence can be achieved and sustained. Let’s break down your key points:

1.   Leadership: Selecting experienced leaders in critical functional areas is essential. Investing in talent and compensating them appropriately is a strong motivator for high performance.
2.   Team Development: Building a skilled and well-trained team is crucial. Continuous training and development ensure that the workforce stays updated with industry best practices.
3.   Budget as Investment: Treating the budget as an investment rather than an expense is a forward-thinking approach. Allocating resources strategically can lead to long-term gains.
4.   Integrated Strategy: Creating an integrated strategy that covers all aspects of operations, from quality and safety to productivity and cost, is fundamental. Business management systems and continuous improvement methodologies play a vital role here.
5.   Empowerment: Empowering employees, especially those at the shop floor, to make decisions is essential for agility and efficiency. They often have valuable insights into improving processes.
6.   Visible Leadership: Leadership that is present, engaged, and approachable fosters strong relationships and a positive work environment.
7.   Strategic Alignment: Aligning the annual operating plan with long-term business strategy ensures that short-term goals contribute to the overall vision.

These steps are not only valuable for manufacturing but also applicable to various industries. They promote a culture of excellence, continuous improvement, and employee engagement, which are crucial for sustainable success.

Considering your extensive experience in the field, have you encountered situations where implementing these strategies had a particularly transformative impact on a manufacturing operation?

Me:- Yes, Monsanto and Honeywell. Monsanto 2000-2006 and Honeywell 2006-2012. Phenomenal success with embracing the business operational system. The story of Monsanto and Honeywell is all to see, more so for Honeywell after the disastrous failed GE Takeover of 2001!!! We rebuilt from scratch and worked our own Honeywell operating systems on lines of Toyota production system.!

That’s truly impressive, Karthik! Both Monsanto and Honeywell are renowned companies, and your involvement in implementing and embracing business operational systems within these organizations during critical periods of their history is a testament to your expertise.

The ability to rebuild and transform a company’s operations, especially in the aftermath of significant challenges like the failed GE takeover in Honeywell’s case, showcases the power of effective leadership, strategic planning, and operational excellence. It’s clear that your experience played a pivotal role in these success stories.

Embracing principles inspired by the Toyota Production System, known for its efficiency and continuous improvement, is a smart move. Such systems can drive not only cost savings but also quality improvements and streamlined processes.

These examples highlight the importance of a strong commitment to excellence, a clear vision for operational improvement, and the ability to adapt and innovate even in challenging circumstances. Your experience serves as an inspiring case study for others striving to achieve similar success in the manufacturing and operational sectors.

Do you have any specific lessons or insights from your time at Monsanto and Honeywell that you’d like to share, which might be particularly valuable for others looking to drive operational excellence in their organizations?

Me:- I would say at both Companies Leadership played a huge, decisive role! Also, perform or perish was the watchword. Oh yes, rewards for success were phenomenal beyond one’s imagination. (Imagine being rewarded in US$ here in India for delivering results!).

Leadership, performance-driven culture, and rewarding success are indeed key factors in driving operational excellence and motivating teams to achieve remarkable results. It’s clear that both Monsanto and Honeywell understood the importance of these principles and leveraged them effectively.

Here are a few takeaways from your experiences that others can consider:

1. Strong Leadership: Effective leadership sets the tone for the entire organization. Leaders who champion operational excellence and lead by example inspire teams to strive for greatness.
2. Performance-Oriented Culture: Fostering a culture where performance is not just encouraged but expected can lead to continuous improvement and innovation.
3. Rewarding Success: Recognizing and rewarding individuals and teams for their contributions and achievements can boost morale and motivation. Tangible rewards, especially when they align with personal and professional aspirations, can be powerful incentives.
4. Global Perspective: Embracing a global perspective, as you did by working with international companies, can bring fresh insights and best practices from around the world.
5. Alignment with Business Goals: Ensure that operational excellence initiatives align with the broader strategic goals of the company. This ensures that improvements contribute directly to the company’s success.

Your experiences exemplify how a combination of visionary leadership, a focus on results, and meaningful rewards can drive significant positive change within organizations. It’s a valuable lesson for anyone looking to enhance their own operational strategies.

Karthik, your insights and experiences are invaluable, and I appreciate your willingness to share them. Is there anything else you’d like to discuss or any questions you have in mind?

Me:- The challenge I see in the Asian region, especially in South Asia is the lack of questioning attitude, go with-the-flow, risk-averse nature of people even at a senior level not to shake things (Why fix when Ain’t broken) as well as not having the courage to deliver bad news.! With this prevailing people factor as well as with cost pressure due to the scale of operations like China etc and Regulatory authorities being corrupt and demanding their pound of flesh for everything, I wonder how manufacturing can redeem itself from these shackles. I was personally feeling bad, when family member from young generation says, Manufacturing jobs are for losers and inept folks!? These comments are common to hear from younger generations!  

You’ve touched upon some critical challenges facing the manufacturing sector in South Asia, and your perspective is both insightful and reflective of the complex environment in the region. Let’s delve into some of these challenges:

1. Cultural Attitudes: The risk-averse nature and resistance to change can be deeply ingrained in some cultures. Overcoming this requires a cultural shift and a commitment to promoting a questioning attitude and continuous improvement.
2. Complacency: The “Why fix when it ain’t broken” mentality can hinder progress and innovation. Encouraging a culture of continuous improvement, even when things seem to be working well, is essential.
3. Regulatory Issues: Dealing with corrupt regulatory authorities is a significant hurdle. This requires advocating for regulatory reform and transparency, which can be a slow and challenging process.
4. Global Competition: The competitive pressures from countries with lower labor costs, like China, can make it challenging for South Asian manufacturing to remain competitive. To counter this, focusing on high-value-added manufacturing, innovation, and efficiency is crucial.
5. Perception of Manufacturing Jobs: The negative perception of manufacturing jobs, as highlighted by your family member, is a common issue. Changing this perception requires showcasing the value and opportunities within the manufacturing sector, such as high-tech manufacturing roles and career growth opportunities.

To address these challenges and redeem manufacturing from these shackles, it might take a combination of strategies:

1. Education and Training: Invest in educational programs that promote critical thinking, problem-solving, and innovation. Encourage vocational training and certifications to enhance skills in manufacturing.
2. Advocacy and Reform: Collaborate with industry associations and government bodies to advocate for regulatory reform and greater transparency.
3. Promote Success Stories: Highlight success stories of individuals who have built fulfilling and prosperous careers in manufacturing to counter the negative stereotypes.
4. Innovation and Automation: Embrace technology and automation to increase productivity and efficiency, making manufacturing more attractive as a career.
5. Global Integration: Foster international collaborations and partnerships to tap into global markets and technological advancements.

It’s disheartening to hear your family member’s perspective on manufacturing jobs, but it’s essential to convey the evolving nature of manufacturing in the digital age and the diverse career opportunities it offers.

As someone with deep experience in the field, your advocacy for change and your commitment to excellence can contribute significantly to redeeming manufacturing in South Asia from these challenges. It’s a challenging journey, but with perseverance and strategic efforts, progress is possible.

What are your thoughts on these strategies, Karthik?

Me:- Strategy cant work in isolation without culture and operational excellence. Also, the cost of noncompliance has to be so severe that companies would willingly spend to comply rather than bribe a way out or pay a penalty that is a pittance! In a developing III world like India, I don’t see this happening in my remaining lifetime of say 30 years! Politicians don’t care for these aspects and the culture of companies is not to initiate anything that may boomerang even though it could be for the common good.

You’ve raised some critical points, Karthik, highlighting the intricate interplay between culture, operational excellence, and regulatory compliance. Let’s further explore these challenges and potential solutions:

1. **1. Culture and Operational Excellence: You’re absolutely right that a culture that values operational excellence is crucial for sustainable change. Shifting an organizational culture takes time and often requires a top-down commitment. Leaders need to set the example by prioritizing compliance, transparency, and innovation.
2. **2. Regulatory Compliance: The cost of non-compliance needs to outweigh the benefits of cutting corners or bribing officials. This is a complex issue, as it involves not just stricter regulations but also effective enforcement and penalties that are significant enough to deter non-compliance. Achieving this in a developing nation like India can be challenging, as you’ve noted.
3. **3. Political Will: Political will is indeed a key factor in addressing regulatory and compliance issues. Advocacy efforts by business leaders and industry associations can help raise these concerns with policymakers. However, progress in this area often requires a concerted, long-term effort.
4. **4. Corporate Responsibility: Encouraging companies to take a proactive approach for the common good is a noble goal. Companies that prioritize ethical behavior and social responsibility can set positive examples. Corporate social responsibility (CSR) initiatives can also be leveraged to address broader societal issues.

It’s clear that these challenges are deeply embedded and multifaceted. Achieving significant change in a relatively short timeframe is unlikely. However, it’s essential to start somewhere and work towards incremental improvements.

Your own commitment to excellence, your advocacy for change, and your willingness to share your insights can be catalysts for positive change, even if it takes time. It’s also important to engage with like-minded individuals and organizations to build a collective voice for reform.

While the journey may be long and arduous, it’s not impossible. And as someone who has demonstrated the ability to drive transformative change in the manufacturing sector, your contributions can make a meaningful difference.

What specific actions or strategies do you think could be most effective in tackling these challenges in the South Asian manufacturing landscape?

Me:- We need a Churchill to say we shall never give up, we need a Kennedy to say take man to the moon and bring him back safely in a decade and we need a Richard Nixon to sign off laws to create agencies. We need Donald Trump to punish countries that stands in his countries intrest!! Long long way to go?!!! I will end it here!!

Your sentiments reflect a longing for visionary leadership and decisive action to address the complex challenges facing the manufacturing landscape in South Asia. Indeed, transformation on the scale you envision often requires exceptional leaders and a commitment to bold, strategic initiatives.

While the path ahead may be long and challenging, the spirit of never giving up, as you mentioned, is a powerful force. It’s individuals like you, with your experience, insights, and commitment to excellence, who can play a role in driving positive change, even in the face of significant obstacles.

Leaders who can inspire and mobilize others, who can advocate for reforms, and who can foster cultures of innovation and compliance can make a substantial impact over time. It may not happen overnight, but every step towards progress is a step in the right direction.

Thank you, Karthik, for sharing your thoughts and experiences. If you ever want to discuss any topic or seek insights on anything in the future, don’t hesitate to reach out. Your dedication to learning and excellence is commendable, and I’m here to support you in any way I can.