US Manufacturing Resurgence

The data for the amount of manufacturing occurring with the US continues to improve. Craig Barner at Forbes had a good recent status check.

Last August, Farok J. Contractor (professor of management and global business with Rutgers Business School) published an article: 7 Reasons to Expect US Manufacturing Resurgence. I loved this article. Contractor laid out a map of some of the factors that are driving some improvements in the level of manufacturing being done onshore. His list is comprised of a range of items from declining real wages and higher logistics costs. It is an excellent article. Contractor ends his article with some countering factors that would tend to drive manufacturing away.

Of course, all indicators are not positive. Three factors could inhibit the US resurgence: 

• The culture devalues science or engineering education. “Nerds,” “geeks” or “wonks” are at the bottom of the social totem pole compared to sports, film and media celebrities. A culture that emphasizes quick results and instant gratification deters students from tackling math, engineering and other challenging subjects.
• Too many students pursue a general college degree. According to a survey released by the Manpower Group in May 2012, talent shortages persist in skilled trades, engineers and IT staff, with “nearly half of U.S. employers struggling to fill mission-critical positions.” In OECD countries an average 23 percent of college degrees are in engineering, science or mathematics. But in the US such degrees comprise only 15 percent – and of these, foreign students earn a quarter of the degrees at the undergraduate level and some two-thirds at the doctoral level.
• US companies lack an apprenticeship system. In other OECD nations like Germany, alternative paths in education lead to diplomas or certificates in technical areas, with employees trained by the company in a particular technology and then retained in well-paying careers. Some US companies are trying this approach, highlighted by G. Bussey in an April Wall Street Journal article. For example, General Electric is sending new employees for crash courses in hands-on manufacturing or sponsoring two-week summer camps at universities on lean manufacturing for high-school students.

To all the manufacturing and quality professionals, you have a growth opportunity we did not expect to see back in ...say 2009. Now is the time to take your courses, get your certifications.

PFMEA Malaise

Time for an annual rant about the lack of PFMEA utilization within our manufacturing plants. It is 2013 people! How many more times will we ship a part "missing a hole"? Yes, the PFMEA form and process can be tedious. The risk ranking values can become a heated and lengthy topic themselves. However, the essence of the PFMEA, the search for potential defects and potential causes, is readily available. Unfortunately, still now as it has been through my quality history since around 1996, most PFMEAs are boilerplate written by one person. Hasn't the pain been enough? Can't we all get along? Get the team together. Stand at the process. Brainstorm. Could the process be skipped? Can the part go into the fixture upside down? Can the insertion be misaligned? on and on. Capture what you talked about and come up with prevention and control idea. Does anyone have a good example of how a team does an effective PFMEA? I would like to hear about it.

Panic in the Face of A Quality Issue - Fuk

Yesterday I posted about the incorrect report of a huge radiation spike at the Fukushima plant.

Now I am reading some accounts from Japan and in addition to the handling of wrong data I am also struck by the common reaction to a quality problem. Shigeto Tanaka of the Yomiuri Times has an account from the area while the alerts were broadcast.

While this reporter was covering the damage by Friday's series of tsunami at a settlement along the coast in Minami-Soma, Fukushima Prefecture, about 25 kilometers north of the nuclear plant, a message was sent around 4 p.m. by disaster response radio broadcast from the Minami-Soma municipal government. The message said: "We have been informed that the Fukushima No. 1 nuclear plant has exploded. Don't go outside."

Listening to the message, about 10 fire company volunteers, who were on alert at the settlement, became panicked and hurriedly left by car, shouting to each other, "Get out of here now!"

This reporter was unable to make a quick decision whether to evacuate.

Today the BBC reports that "The Japanese government has attacked the operator of a crippled nuclear plant for "unacceptable" mistakes."

I have seen panicked reports of a quality issue from both the customer and the supplier side. Panic never really helps the situation. We all know this, but in the heat of the crisis if you do not have some experienced, strong, players you can get into a bad situation. A lot of time can be wasted trying to react to false information.

By the way, one quote got me, "The government understood the workers were overworked and under stress, he added." That reminds me of the saying, "you are only as good as your last f*ck up."

Measurement Error at Nuke Disaster

Here is another "ah ha" moment. Earlier this week officials in Japan reported a radiation spike at the Fukashima nuclear plant that caused workers to flee and international alarm. Today the officials reported that the data was a mistake:

"The number is not credible," said Tokyo Electric Power Co. spokesman Takashi Kurita. "We are very sorry."


How often does this happen in normal factory operations? During PPAP or other quality data reviews we often see odd or out of place data. Sometimes the error is due to simple transposition or data entry errors. Sometimes the data is taken in an incorrect way. So, what to do?
First, data that looks out of place, or extreme, should be reviewed immediately. If the data is correct, then react appropriately. The point here is to treat unexpected data urgently. Verify it. If it is true you are going to want to problem solve it. If the data is wrong you want to correct it as close to the time it was taken to be able to capture the samples and avoid costly inappropriate response.

The Hollowing of the Middle

David Leonhardt at the NYT has as article about a recent paper by economist David Autor. I cannot read Autor's original paper, but Leonhardt's article is worth a read.
Over the course of the past 20 years the middle class has seen declines in opportunities while low and high paid jobs have increased.
In the last two years especially I think this is pretty clear. We continue to lose good factory jobs with good wages for line workers and salaries for shop management. The costs for factory jobs are just too low outside the US/Canada. HOWEVER, Autor's data indicates that while middle wage workers did fare worse than high wage workers, the middle wage workers fared better than low wage workers.

On wages — the most important factor for most workers, since the vast majority of workers remain employed even when unemployment is high — middle-wage workers have fared worse than high-wage workers but better than low-wage workers. Rising inequality, rather than a hollowing out of the middle, seems to be the best summary of recent wage trends.

Consider the change in inflation-adjusted wages by education attainment from 2007 to 2010:

Magnified Inspection

One of the countermeasures to weak PFD/PFMEA/PCP that I showed in an earlier post is magnified inspection.
The intent of specifically adding an exercise like this to to help highlight the need for an internal non-production department close inspection of the parts being produced. I am not talking about 100x inspection, really just 10X or slightly higher. The goal is to find obvious defects. The inspector should not be targeted toward specific "high risk" areas. I find that the high risk areas, or areas that the inspector would be told to look at, will already be in good control. The concern is the "unknowns". Have the inspector slowly scan around the part looking for "issues". The issues can be anything unusual. I know that this all sounds vague, but there can be some good learnings from this type of exercise.



In some cases, if you have a good magnifier with a display screen a small team can participate in the review. Treat it like a brainstorming session. Things like "discoloration" can be noted, for example. In a real world example, the discoloration was due to feed and speed on a drill. The discoloration was caused by heat and the heat caused micro cracks. the micro cracks probably could have also been identified in this inspection. But noting the discoloration could have driven the machining team to identify the cause and the fix. The damage would have also been more likely to have been identified at that time.


Picture of "Overlapping semi-circular markings and a wrinkled surface texture adjacent to the fracture surface were indicative of cold flow"


Remember, the focus is on the finding the unknowns before your customer does.

The Cost of Manufacturing in the US

I had a link to an article about photovoltaic cell production in the US and how the costs were just too high to compete with the surging supply base in China.
I am not enough of an expert to understand exactly what the cost differences are between the US and China. I know labor cost is a chunk of the cost, but what percentage of the production cost is labor and what other big differences are there? My interest is not that I am focused on producing in the US, rather it is on what are the competitive pressures to overcome whether in the US or anywhere.

The Seeking Alpha website, which is a stock analysis site, recently had an article about the recent ISM survey regarding the US manufacturing status. The author, Ronald Rutherford, walks through some analysis of the survey and other data. It is a good article, worth reading.

Some key points: China manufacturing growth is slowing, some consider that a bearish sign for the world economy. Ronald ponders whether that is true. US manufacturing is working hard, costs of overseas components are rising (partly due to weaker $).

The actual survey ressponses quoted are very interesting. I wish I was an ISM member:

Manufacturing: # "Our plants are working 24/7 to meet production demands." (Fabricated Metal Products) # "Capital projects moved from inactive to active" and "Award of long-awaited contracts."

ISM is the Institute for Supply Management: