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Manufacturing and innovation belong together

Product design in the global economy is different in many ways. One of the things that has long been touted by HR wizards and CEOs alike is how teams—be they engineers, managers, products designers, or all of the above—no longer have to be in the same geographic location. The thinking goes that, Time Zone challenges aside, a team can be comprised of the best and the brightest, regardless of whether individuals are in Chicago, Hong Kong or London.

On paper, and to shareholders, I suppose that looks good. Certainly efficient. And maybe, in practice, it can work in some situations. What’s being left out, however, is how innovation works. It can’t be neatly planned, organized on a spreadsheet and calculated. Innovation is not formulaic.

Let’s look at manufacturing. The leaps forward in the manufacturing design process don’t necessarily happen in front of a video conference camera or on the phone. Many times, they occur during an unplanned meeting in someone’s office, looking over a prototype. Or over a chance encounter in the hallway between two team members. Not to mention on the manufacturing floor itself, when an engineer can see firsthand the challenges of making a particular part.

I was refreshed to see the recent remarks that Gene Sperling, Director of the National Economic Council, made at the Conference on the Renaissance of American Manufacturing in Washington at the end of March.

Sperling discussed how the U.S. lost consumer electronics manufacturing, but also lost out on future innovations, including advanced batteries, flat screen TVs, cell phones, and so on. He talked about how innovation goes hand-in-hand with manufacturing. His examples included Boeing moving their engineers out of their cubicles in an office building and into the manufacturing plant, and Intel manufacturing its current chips here in the U.S., where its engineers are located. Furthermore, he noted how the iconic Bell Labs, which churned out so many innovations over the years, kept its thinkers and doers under the same roof.

Both Boeing and Intel have the right idea: Engineers need to have floor manufacturing experience. It shifts how you design, and in a better way.

“More than any other industry, manufacturing firms account for a disproportionate share of innovative activity in the U.S., 70% of private sector R&D and over 90% of patents issued,” said Sperling. “As a country, it matters where these benefits occur.”

There’s been so much talk of re-shoring in recent years—how companies are bringing factories back to the U.S. after discovering that overseas manufacturing isn’t as inexpensive as once thought. Adding in shipping charges, defects, delays and other unexpected costs can negate the savings from cheap labor. But U.S. companies also need to calculate the cost of keeping its innovation teams further from the manufacturing floor. Otherwise, the innovators of tomorrow may all be on distant shores.

Paul J. Heney – Editorial Director
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