Newsletter Masthead
October 2009

The Future of American Manufacturing

Manufacturing has lost over 2.1 million jobs since the recession began. Many of these jobs will not be returning...especially labor intensive manufacturing. (Look at the textile industry.)  These types of jobs will go to where the labor cost is the lowest….and that’s not in America. So what is Future of American Manufacturing?
If you were not providing any unique value…sorry to tell you…you might not be able to stay around and/or be profitable. 
Quality has always been a major differentiator in manufacturing. Made in America is a mark of quality all around the world. If you are building a new chemical plant, do you want to buy valves and pumps made in China? The answer is no. Look at the recent drywall from China incident making people sick in the US. This example shows a possible impact of low quality and low cost items. But having great quality is becoming an EXPECTATION to doing business.
Great Customer Service? Yes great customer service can allow you to maintain your margins, but competitors can invest in customer service as well and it is becoming an EXPECTATION from customers as well.
What is left? Relationships…. understanding your customer and potentially being able to produce made-to-order products profitably. Product Configuration and Mass customization have been concepts that have been around for a while that more and more American Manufacturers are embracing. Product Configuration involves systemization of your manufacturing process to allow customer specific requirements to be entered into the system and a manufacturable product configuration being returned. Mass customization aims to provide goods and services that meet individual customers' requirements with near mass production efficiency.
The mass customization value proposition comes from the dual opportunities of increased market share and higher profit margins. It starts with understanding the Customer Sacrifice Gap, Good Variety vs. Bad Variety and the Four (4) Faces of Mass Customization.
Customer Sacrifice Gap – the gap between the product the customer wants and what is available in the market
Good Variety vs. Bad Variety – good variety is product/service variety that customers are willing to pay additional for. Bad variety is variety that customers are not willing to pay for.
Four (4) Faces of Mass Customization
Transparent – providing customers with customized products whose customization is
transparent or unknown by the end user
Collaborative – customers collaborate with customizer on the design and delivery of the product to specifically meet the customer’s needs
Adaptive – providing a standardized product that is able to be customized in the
hands of the end user
Cosmetic – providing a standardized product that is marketed to different
customer groups in unique ways
How to Mass Customize?
These benefits are not obtained by incremental changes to a mass production system, but by a fundamental switch in production paradigms. Our advice for making the change is:
1) Start small. As systems and techniques are proven, scale them up.
2) Start at the front end of the production processes first, use shallow customization there, and as the mass customization systems are proven, backwards integrate into the parts of the mass production systems which will provide the greatest consumer value by being made flexible.
3) Use software systems designed to support this new paradigm, don't expect that mass production software can be made to fit this new paradigm with only minor modifications.
4) Make the above stated benefits of mass customization the goals of the mass customization project. As the mass customization project is being planned and deployed, check the project against these goals.
5) Let us know if there is any way we can help.
Ben Moore
Agent Technologies, Inc.
FREE Download of Chapter on Product Configuration from our Book: The Consumer's Workshop: The Future of American Manufacturing (Download)

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The Consumer's Workshop: the future of American manufacturing
The Consumer's Workshop: The Future of American Manufacturing is a hand book on how to setup the systems within your company and create the workforce you need to be successful now and in the future.  Written by authors that have worked at some of America's largest manufacturers, founded their own manufacturing organizations and helped numerous small manufacturers grow.
The Consumer's Workshop: The Future of American Manufacturing is a must read for today's business leaders.  It is insightful and provocative in its approach to where US manufacturing has been, how manufacturing got into the troubles it faces today and what we need to do to become the standard for world class once again.  If we want to know how to regain that competitive edge once again, the roadmap is certainly the pages of The Consumer Workshop.

-- Bruce Vaillancourt,Director, NIST MEP Program, TechSolve, Inc.

Book The Consumer's Workshop is an extremely timely review of how manufacturing strategy developed in the past
and how it will change in the future. The author team clearly demonstrates that companies have to change -- and provide plenty of advise how such a change should take place."
-- Frank Piller, PhD, International Manufacturing Consultant

As the authors make clear, eventually American manufacturing will become the workshop for direct production of consumer's own designs -- or it will be no more. Begin that path by following the steps outlined here."
-- B. Joseph Pine II, author, Mass Customization: The New Frontier in Business Competition

Investment: $12.99





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The Future of American Manufacturing

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Manufacturing Statistics October 2009


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Manufacturing Statistics 
1) Manufacturing Output increased 0.6%in August 2009 with durable goods increased 0.5% and nondurable goods rose 0.7%.
Source: Federal Reserve Board
2) Manufacturing Employment fell by 51,000 jobs in September 2009.  
Source: Bureau of Labor Statistics
3) Manufacturing Trade Deficit in August 2009 decreased $0.8 billion, or 2.0%, to $41.9 billion.   Sources: Census Bureau, Bureau of Economic Analysis

4)Manufacturers' New Orders in August 2009 decreased $2.8 billion, or 0.8%, to $352.9 billion.

Source:Census Bureau

5) Manufacturers' Inventories decreased $3.9 billion, or 0.9 %, to $498.2 billion. Inventories down 11 consecutive months.
Source: Census Bureau
Agent Technologies, Inc.
Phone:  513-942-9444
Fax:  513-942-9446
Founded in 1995, Agent Technologies, Inc. provides e-Commerce Solutions, Business Reporting Solutions, e-Business Strategy Development and Agent Based Systems. We specialize in comprehensive eCommerce 4 Manufacturing (sm) Solutions through our manufacturing consultants and software applications. Try xRP - our online business productivity tool for CRM/ERP.  FREE 30 Day Trial!
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