Smart Business Magazine, Oct 2012

16 Smart Business Indianapolis October 2012 there had to be a rapid restocking of the shelves just to handle that moderate traffic That got our factories humming again If you think about it manufacturing essentially produces inventories for the economy So that helped a lot Now though the manufacturing sector has caught up with the shelf shortages so the inventory catch up surge that got the factories buzzing is dying away The inventory swing is finite Waldman says Eventually the stocks on the shelves reach short term equilibrium with the pace of sales Its a one shot deal in effect It comes back to equilibrium Another factor in the slowdown has been economic volatility in countries that Waldman labels emerging markets After the recession we had a stronger and a faster rebound in emerging markets particularly some of the larger emerging markets than people had thought he says China India Brazil Mexico these markets all felt the downdraft of the crisis in the industrialized world and they certainly slowed But they implemented policies rather quickly and came back rather quickly As we all know over the last decade U S manufacturing has been making a lot of investments in those markets and the health of those markets has been increasingly important for U S manufacturing profitability This helped propel manufacturing into a more normal recovery than almost any other sector of the economy Thats why manufacturing was able to lead the recovery However thats another development that can be added to the list of trends that drove the manufacturing rebound but have now begun to slow down Now the storyline is changing Waldman says The global situation is troublesome particularly for manufacturing The activity in the emerging markets is slowing dramatically Thats why were seeing that manufacturing is not really the leader anymore Its starting to get mixed up with the troubles of the U S and the global economies Durable drivers But not all of the recovery driving trends are disappearing Some look like theyll have staying power and that endurance should barring other unforeseen problems continue to keep the U S manufacturing rebound at least somewhat on track Exhibit 1 leanness and efficiency Manufacturers have been able to take advantage of being much more lean and efficient which has improved their overall competitiveness Moutray says When I look at the sectors that have done well the last couple of years I think theyve taken advantage of exports which speaks to that level of increased competitiveness Exports are going to be an evermore important part for the manufacturing sector I think were going to continue to find ways that we can better compete Another manufacturing positive trend expected to have staying power is U S manufacturers increased competitiveness which is being fed by several factors advances in Special Report Manufacturing MANUFACTURING RELATED BOOKS FOR CEOS The 12 Principles of Manufacturing Excellence A Leaders Guide to Achieving and Sustaining Excellence Larry E Fast Productivity Press 266 pages The 12 Principles of Manufacturing Excellence provides a practical approach for implementing and sustaining business strategies that promote manufacturing excellence The author explains how to inspire top notch performance while creating an atmosphere that encourages leadership and mentoring He provides examples that illustrate how companies have achieved vertical and horizontal alignment he explains how to instill a culture that sustains high quality and world class performance via 12 principles of manufacturing excellence and he provides methods to track progress by plant and by function emphasizing lean manufacturing and Six Sigma tools to improve manufacturing operations