New Approach Would Get Us Back in Game
Sometimes it’s wise to remind ourselves how we got so many of our basic industries into a bind competitively with foreign producers. It wasn’t simply high wages, or excessive government regulation, or some mysterious cultural deficiency.
Rather, it stemmed for the most part from our losing the edge in manufacturing practices. We simply quit making things efficiently and well, activities we had been quite good at.
“Perhaps American managers felt that the production problem was ‘solved’ and that they could turn their attention to more important matters,” observes Elwood S. Buffa, who holds the Times Mirror Chair in Strategy and Policy at UCLA’s Graduate School of Management. Those “more important matters” were marketing and finance and we trained a generation of managers “to make money rather than goods.”
In his book, “Meeting the Competitive Challenge,” a primer for corporate executives, Buffa recalls the conglomerate era: “It was strictly a financial portfolio concept.” Instead of running factories, the conglomerate’s chief executive “might just as well have been selecting stocks from the New York Stock Exchange.”
Effective Strategies
Buffa’s message is that it’s time to get back to developing effective manufacturing strategies, to relearn what we once knew, and that many of the excuses made for our long slide simply don’t wash. For instance, there’s the argument that our steel capacity wasn’t modernized adequately because complying with environmental and other regulations required so much capital. Yet, Buffa points out that European steel producers spent equivalent amounts on such things and the Japanese spent more, and they still managed to modernize.
The difference, in his estimation, is in how factories are managed, jobs are organized and labor relations are handled. Management has “pegged workers into narrowly defined jobs that required arms and hands but no brains.” It has done little to encourage cooperation between manager and production worker. The result is inefficiency, excessive cost and shoddy workmanship.
Union leadership may be partly to blame, but management has helped force labor into an uncooperative stance by keeping it so far from the strategic planning process.
Many of Buffa’s recommendations relate to redesigning jobs to enlarge the tasks, letting teams handle groups of production activities rather than having individuals be the slaves of a production line, doomed to mindless repetition.
There has been some experimenting with such changes. General Motors Corp. has had success with semi-autonomous work teams at a Cadillac engine plant. Team members rotate among a dozen or more production jobs and also handle repair and other duties. Moreover, plans for the company’s recently announced Saturn small-car project include less reliance on production-line assembly methods and giving labor a bigger role in factory floor management decisions.
Changes Seem Logical
The changes seem logical enough, yet instituting them requires a significant change in how American management views the capacity of the employee to operate in a flexible environment and trusts the union to support the profit-making goals of the corporation.
Robert Reich has suggested America’s future lies in production systems organized to turn out smaller batches of a greater variety of products rather than the old high-volume lines where we’ve lost our lead. Buffa contends that’s one of many viable strategies.
Some consider a resurgence of American manufacturing know-how unlikely. They contend our competitive strategy should be to emphasize areas of competitive advantage--service and high-technology industries.
Buffa maintains that’s no answer, that there won’t be enough service jobs and that we would be giving up too easily. Moreover, he believes the skills of the factory engineer and the production expert are back in demand, signaling healthy change.
“Our strength is in our adaptability,” he says. Entrepreneurship is “America’s hidden weapon against the Japanese.”
