Triangulating the Problem of American Manufacturing, Part 1

Triangulation is a process by which you figure out where you are by checking three points or positions. Triangulation can be used to study a phenomenon by comparing three (or more) types of points of view or data sources. Three things came together for me this week on the problem of American manufacturing.
This week the news was GM’s announced cuts of 30,000 jobs and closure of 9 more factories by 2008, the projections that Toyota will surpass GM in 2006 in vehicle production based on targets to be announced next month, and an article on November 22, 2005 in the WSJ titled Firms’ New Grail: Skilled Workers about U.S. manufacturers facing critical shortages of skilled workers. Let’s see how these things triangulate.
In summary the article on skilled worker shortages sites a study by the National Association of Manufacturers and Deloitte Consulting that 81% of U.S. manufacturers face “moderate” or “severe” shortages of skilled labor. This is resulting in lost business opportunity for American manufacturers.
The shortage of job skills goes beyond the scientific, engineering, and technical areas. Richard Kleinert of Deloitte Consulting LLP is quoted in the NAM report, “Manufacturers face the additional challenge of poor skill levels among current employees” and notes that employers cited inadequate training in basic job skills such as problem solving (insufficient in 46% of respondents) and reading, writing and communications skills (insufficient in over a third of respondents).
There is rising awareness of the need for investing in people. The NAM’s Skills Gap Report urges government, educators and government to address this problem in a coordinated way.
Not for the first time when faced with a problem, I turn to Toyota. Toyota invests in people. There’s a reason they call TPS the “Thinking People System” at Toyota. But even Toyota has been reporting a lack of people experienced in their production system to act as teachers and coaches to train staff in their newly built factories around the world.
One thing they have done to combat this is to turn a part of their Motomachi plant, their oldest automobile assembly plant, into a “teaching factory” or Global Production Center.
I have some free advice to offer the GM leadership: Take just one of the 12 plants you plan to shut down. Empty it. Redesign it for true Lean manufacturing and use it as a “teaching factory”. You have a long partnership with Toyota already, so ask them for help setting this up. This will save you far more money in the long term than the cost of keeping it open.
Toyota’s investment in developing the skills of their people is not limited to the shop floor. The same philosophy and principles used to make the factories Lean are being taught to the people working in the front end of the business through the University of Toyota. There is not a whole lot of information on the University of Toyota in the public domain. Please let me know if you have more information about the University of Toyota to share.
Toyota is certainly not unique among global corporations in encouraging ongoing education and skills development among its people. They are noteworthy in that the combination of their operational model’s effectiveness and their commitment to people has resulted in decades of uninterrupted profitability and growth.
This reminds me of a Peter Senge quote that I like. He said “The only real competitive advantage a company can enjoy is the ability of their employees to learn faster than the competition.” I like this quote because I’ve always said that kaizen is fundamentally about people learning.
The problem a lack of skilled workers is certainly not unique to American manufacturing. Japan faces a shortage of skilled workers (or just workers period) with their aging and declining population. Certain booming areas of China have problems finding skilled workers.
There’s no replacement for human wits when it comes to quickly and practically solving day to day problems. Maybe some day we will have artificial intelligence that is as smart and as flexible as humans’ minds, but not yet. Machines don’t come up with ideas. ERP systems don’t come up with ideas. Products don’t come up with ideas. People come up with ideas. So why don’t we sped more on people?