Make or Break

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The prospects for manufacturing have never been better. Innovation is rampant, capital is available for experimentation, global markets with billions of consumers are opening their doors to new and existing products, technological changes have enabled new types of materials and processes, and the standard of living for people in established and developing economies is steadily improving. Indeed, prowess in operations and fabrication is a critical platform upon which leading companies can still build their next wave of success—and some of them will.

The only problem is that comparatively few companies are behaving as if they’re entering a golden age for manufacturing. Indeed, all these signs of a potentially bright future have appeared at the nadir of manufacturing’s perceived influence and impact on the world of business. It is difficult to pinpoint the precise moment that this happened, but at some point in the latter part of the twentieth century, business leaders in general, and even manufacturers themselves, seem to have lost respect for manufacturing. This loss of respect is unfortunate, even puzzling, because most companies are still producers of goods, even in an Internet age. They depend on the manufacturing function, and they are almost certainly going to be preoccupied with manufacturing processes and quality in the coming years.

At the same time, the manufacturing function will face a formidable mix of challenges during the next 20 years. These include shortages of energy and raw materials, stricter environmental regulations, a wild expansion in product complexity and variety, outdated infrastructures, and a dearth of motivated and capable personnel. It is hard to see how manufacturing units can cope with this cocktail of global challenges if they are treated as the weakest link in their companies.

In short, producers of goods—those companies that rely on manufacturing for their livelihood—stand at a crossroads today. And since both social welfare and national economies depend for their vitality on a healthy manufacturing sector, so do the rest of us. All of the elements that could launch a revival of manufacturing are at hand, and manufacturers can take that path, boldly and deliberately adopting the managerial and technological practices—some old, some new—that will allow them to thrive, even while facing intensifying pressures. But unfortunately, many manufacturers have chosen a path that leads directly away from this exciting series of possibilities. If they continue in that vein, unable or unwilling to generate solutions to the problems facing them, we may see not just companies, but whole industries wither. Not just in the Rust Belts of industrialized nations, but around the world, manufacturers will doom themselves to decline, and in some cases extinction.

That’s why this inquiry into manufacturing’s future is titled Make or Break. It explores whether manufacturing will break (continue to suffer irreparable losses) or whether it will make an invaluable contribution to fulfilling corporate aspirations. Neither future is preordained, either at the macroeconomic level of a country or at the micro level of an individual firm. To make it or to break it is the most critical choice facing every manufacturing leader.