Noam Schieber has a fascinating article in The New Republic about how one of the problems with our manufacturing sector is that we’re not producing people equipped to manage it:

Since 1965, the percentage of graduates of highly-ranked business schools who go into consulting and financial services has doubled, from about one-third to about two-thirds. And while some of these consultants and financiers end up in the manufacturing sector, in some respects that’s the problem. Harvard business professor Rakesh Khurana, with whom I discussed these questions at length, observes that most of GM’s top executives in recent decades hailed from a finance rather than an operations background. (Outgoing GM CEO Fritz Henderson and his failed predecessor, Rick Wagoner, both worked their way up from the company’s vaunted Treasurer’s office.) But these executives were frequently numb to the sorts of innovations that enable high-quality production at low cost. As Khurana quips, “That’s how you end up with GM rather than Toyota.”

Having gone to a university (and specifically a college within the university) more vocational than elite, I hadn’t realized any of this. It makes sense, though. I have a degree in Computer Information Systems from Southern Tech University’s College of Industrial Technology. One of the reasons I attended Southern Tech was because it actually had a CIT. My runner-up choice, The University of Ouachita, had an Management of Information Systems major in the College of Business, but I had decided by that point I was wanting something more tech-oriented than business-oriented. Besides, Southern Tech had an MIS major, too. The main difference between Southern Tech’s CIS program and its MIS program was that the former was more technology-oriented and the latter more business-oriented. I was a CIS major and my roommate Hubert was an MIS one. In retrospect, I probably should have gone MIS.

However, the College of Industrial Technology is almost exactly the sort of thing that Schieber says is missing these days. It has various majors that are geared straight too industrial management. For instance, I minored in Industrial Supervision. One of the more lucrative majors in the CIT was Industrial Distribution. Though the CIT is one of the main reasons that I attended Southern Tech, it’s not a college that the university particularly values. You know all of those bumper stickers that say “University X – College of Y Alumni?” The CIT never, ever had one.

Nor was it the destination of choice for the ambitious. Most did as Hubert did and went into MIS. Had I known that I had the ability to excel in the college environment, there’s a good chance I would have done the same. I was one of only four people in both the CIT and the Honors College. That’s actually misleading, because at the time they inexplicably put Childhood and Human Development in CIT and two of the four of us were CHD majors (and would today be classified in a different college). When I was looking at writing a thesis, I discovered I would have been the third student in the history of the colleges to ever write a thesis from the CIT. This despite the fact that the CIT was one of the colleges that existed at the founding of the university.

So I guess it’s no surprise, what Schieber says. Some of it may be circular. People don’t want to go into fabrication management because it’s a declining industry. Then the lack of people able to oversee it in the US unites with other factors (cheaper labor and facilities offshore, being the primary) to hasten the decline.

My grandfather on my mother’s side lacked a college degree, but I assume was a relatively smart fellow (he died before I was born). He made his way to become a foreman at the local plant where they built whatever it was that they built. With the accessibility of college and with colleges tending to divert people away from factory management, in today’s environment he probably would have gone to college and majored in something else. This can create something of a dearth (or the appearance of one) of leadership-material coming off the factory floor into supervision as those that would have worked their way up gaining a better understanding of operations along the way instead come straight out of college and do something else.

But we’re not there, yet. When I worked for Wildcat, there were production managers that had in their younger years worked the floor. One got a college degree at night, though the other didn’t. Wildcat was a relatively small company and you could excel without the need of HR departments drafting meaningless degree requirements. I’m not sure how true that is at larger plants, though.

Here’s a follow-up, explaining that the Japanese and Germans, constrained by higher labor costs than the US, made lemonaid out of lemons and focused more on productivity than cost-cutting. Ecco and I had a back and forth about unions a while back wherein he cited the German model as a successful one with the implied question of why it didn’t work out that way here. Perhaps the answer to that question is contained in the second piece: American companies always could compete on price because they had the domestic market to support it. Because of that, we were unprepared to be undercut by foreign competitors. Had we focused less on labor costs to begin with, perhaps we would have been better equipped with more scalable production models that manage to do a whole lot more with only somewhat more resources. But now we have the worst of both worlds (in the auto industry, at least), unions limiting the workforce flexibility that could turn things around on one end and the quick, lazy fix of offshoring production on the other.


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7 Responses to Are We Missing Production Managers?

  1. web says:

    Uhm… our manufacturing sector is screwed up because it’s vanishing overseas to places where the “cost of labor” doesn’t include environmental and OSHA protections.

    Arguing that we don’t have enough “management” in the equation is somewhat superfluous.

  2. trumwill says:

    That’s one reason, Web, but that doesn’t mean it’s the only reason. If it all came down to cost, we wouldn’t have any manufacturing in this country at all (or Europe, or anywhere else but Asia). The question from the article is… if we could manage to bring those jobs back, would we have somebody to manage them? I think the article makes a pretty good case that our employee hierarchy system could make it difficult to be competitive anyway. And I think it also points out that one of the reasons that we were hit so hard by cheaper foreign labor is that while the Europeans and Japanese were competitive by creating better production systems, the US relied on its primary advantage: being cheaper than Europe and Japan. It’s interesting stuff.

  3. SFG says:

    Yeah, the Germans still make stuff, and they’re even more unionized and regulated than we are.

    I went to a Lesser Ivy, so I can provide the complementary experience. I think I knew one guy who went into construction management. EVERYONE wanted to do I-banking, law, or (occasionally) medicine. A handful of people went into science. Why? Money! The go-go financial sector not only messed up the economy, it also siphoned off the business talent that might have otherwise been used in manufacturing.

    But I think the business culture in America is particularly bad; they don’t care about producing a good product, only pumping up profits for the next quarter before the whole company goes downhill. I think it’s the focus on stock price as opposed to longterm profitability. Then again, IANAB.

  4. kirk says:

    I work in a factory. Like the pointy-haired boss in Dilbert, most of our management consists of jargon-spouting do-nothings. The article pretty much nails it.

  5. ecco says:

    There’s still a good deal of manufacturing that gets done in the united states. In general, most manufacturing managers or at least the ones I’ve met don’t come out of schools of industrial technology, but instead they come out of engineering disciplines with a few exceptions. There’s also plenty or trained people especially at the execution level. Instead, I think the issue is more of a capital/upper executive challenge. I think a large part of that is based on american business especially public corporation relationship to accounting. Unfortunately, these issues take too much time for a blog comment. Anyway, if anyone is interested the blogs Lean blog and evolving excellence are good places to start.

  6. ecco says:

    Also, I think a big problem in America especially in the last ten years is that we make home loans plentiful but business loans especially manufacturing loans hard to get. This is one area of industrial policy where countries like germany, france, japan, and China have definite advantages. Of course, like everything else the issue is complicated and too many loans can lead to problems. But we could still stand for more capital directed to manufacturing. Finally, I think the biggest issue is the disappearance of manufacturing from cities. Along the lines of Jane Jacobs new ideas tend to sprout in cities before they radiate out. Given that manufacturing has no place in cities ( an exaggeration I know), I think manufacturing is not benefitting from new idea generation. I think unfortunately for most city dwellers coming up with new ideas the natural course now if for them to develop the idea and then find an asian factory rather than a factor an hour from them with ultimately lower supply chain costs. A good example is whatever that Saint Louis company that came up with that hamster game. They easily could have manufactured the game in factories within 3-4 hours of Saint Louis and had a supply chain with lower costs than going to China. They would’ve had an easier time ramping up production when the craze for the item hit. Even Mexico would’ve only been a 15 hour drive away with almost the same cost structure as China. Anyway, sorry for the long rant.

  7. trumwill says:

    Ecco, no apologies necessary! Those are exactly the sorts of comments that I was hoping for.

    Good point about the cities. I am half-driven crazy sometimes by this country’s misallocation of people. There’s so much land and yet we end up concentrating so many of our best minds in comparatively few places. Well, so many people in general. This is particularly true in the IT sector, though some smaller cities like Boise have surprisingly strong sectors.

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