Monday, November 20, 2006

The Industry-Energy Knowledge Gap: Getting Wider?

I’ve learned a few things from the National Association of Manufacturers’ They share some rather sobering observations about government policy and its impact—or lack thereof—on manufacturing competitiveness. Here’s my reaction:

It’s worth mentioning that manufacturing, along with mining and agriculture, is the true foundation of an economy. All other activities—banking, real estate, wholesaling, retailing, broadcasting, the U.S. Marine Corps, places of worship, and so on—merely rearrange the value that the industrial foundation produces.

The diminishing number of U.S. engineering degree holders is an eye-opener. There is a growing disconnect between non-technical corporate leaders and the people who make things happen on the plant floor. Industrial decisions are increasingly made by people have no concept of how heat, force, and motive power are applied to raw materials to transform them into the products we use every day. Similarly, many policy leaders are not familiar with industrial decision-making, which challenges business leaders to strike a balance among risk, time, and money. Also, let’s remember that our manufacturing facilities have fewer production people trying to cover more responsibilities. As a consequence, competition arises within industrial corporations, especially at budget time, pitting plant against plant, department against department. Example? During a recent plant walk-through, a question about a persistent steam leak was met with the response “it’s not my leak.”

So to sum it up: a dim awareness of how manufacturing works—of how resources are budgeted and utilized in the creation of wealth—opens the door to waste and inefficiency. This insidious “competitor” resides inside our own facilities, inflating the cost of the goods we produce, effectively undermining our competitiveness. The good news is that this "competitor" can be acted upon immediately, without the time and effort needed to draft a bill and broker a policy consensus.



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