Indian Manufacturing: Time to teach? To learn?
Friday, September 9, 2011 at 8:41PM 
The visitor, the CEO of a public sector agency, was impressed with the plant. He said so, after we returned to the meeting room. I told him in return: “Everything we know we learnt from our customers.” The man paused. “We should stop admiring foreigners so much,” he chided the air about him. Ours is a 100% exporting company—if you’ll overlook that two customers, only two, are Indian plants of American companies. “The time has come for Indians to teach the world,” he said, powdering a coconut cookie over the glass bowl before him. He dropped a nibble-size bit of the cookie in his mouth and rested his eyes on mine. I remained silent.
“Really?” I had wanted to ask. But business is quite often the art of asking your ego to help zipper your courage.
They aren't idle as one might imagine, those who have lost in the last two decades a bit of the action in manufacturing—not in the the US, not in the Eurozone, not in Japan, and not in Japan’s neighborhood. In the US in this year they have begun to sum the costs of outsourcing manufacturing, scraping and unraveling costs that were buried in other accounts, and they have discovered that Americans could have lost in their outsourcing expeditions. In the same time, they have developed software for DFMA (Design for Manufacturing and Assembly) through which they can increase productivity so steeply that when the software is applied for the same part simultaneously in China and the US, the savings lose flesh and lose all allure. After that exercise, the guys have added the costs of logistics and defects-management, and they have come up with red, red numbers which they are going around with, showing them to folks. One of them who is catching attention with red numbers that he found himself is David Meeker, lecturer at MIT.
Already, some large corporations have brought some production back home to the US. NCR, GE, and Honeywell are visible examples and their experience has a new B-word raring to replace Bangalored, and that word is backshoring. And, though these teachers and executives have such exciting news, they aren’t crowing yet, they are at the moment merely presenting papers and pondering next moves. However, they have generated enough interest among enough manufacturers to make a reverse surge a (for Asians) worrisome possibility. For garnish for backshoring, there are the rising labor costs of China, and labor shortages, and uncertainty in foreign exchange rates, and, for large corporations, the ever-present dangers arising from poor treatment of workmen. Now add to the list the nagging fear of the threat to intellectual property.
Click through to "10 factories that changed the world"The first major mass-production hub was probably Venice, which produced a ship a day in its heyday, so as to rule the trade routes during renaissance in the 16th century. Later, in the 18th and 19th centuries the Industrial Revolution brought big manufacturing to Britain, and the entire western world. In America's turn men like Henry Ford contributed great innovations in mass-manufacturing. Right after, Japanese entrepreneurs with enviable zeal went to America and brought back American folks (Deming, in the main) who taught them to use statistical techniques to secure near-zero defects in product quality. Homegrown Japanese thinkers like Toyota’s Taiichi Ohno figured out the flows that yield low cost and high value. Some distance away the Taiwanese did the same more cheaply. While Americans pondered their failings, wealth found favor with a Maoist communist and China became the site for every advanced nation's larger factories—Japanese and European, Taiwanese and American. Now when the battle for manufacturing dominance has been, it so certainly seems, lost to China, the Americans appear to be coming up with new ideas, which the stories of NCR and GE and Honeywell suggest. In sum, manufacturing moves in and out and back into places where there is a constant interest to learn, and to innovate.
Even as Americans were struggling against Japan, American professors and businessmen and writers in search of a story went to Japan to learn. Some like Liker embedded themselves in places like the Toyota Motor Company and observed everything with the fresh eyes of interns. What men like Liker saw, they came back and described to Americans across the nation, through public and private talks and bestselling books. What they had seen were the fruits of the labor of men like Taiichi Ohno, who, through relentless reflection and minute observation built the Toyota Production System, which system is a Standard Operating Procedure in the rest of the world today. So, now as China pauses at a peak, America mulls a newfound opportunity to reclaim the game.
That is the question with which I gazed at the elderly man seated across me in my meeting room. Why this tearing hurry to teach? When we have a pressing need to learn? Who is India’s Ohno? Who is India’s Deming? Who among us has in this moment earned the right to teach the world? I ask these questions not with the doubtfulness of a pessimist, or as one who doubts the capabilities of our nation. I merely submit that we will serve our nation better through learning with even increased vigor, from the long list of teachers available around the world.
There is greater prestige in being a student. As a person or as a nation. Now and always.
Shashikiran Mullur
anandvrao sent me this interesting link on twitter: bcg.com/documents/file…
