"Business growth isn't random."

That's one of my favorite quotes, from manufacturing pundit overall bad cat-daddy Doug Hall. He was quoted this past March addressing a group of manufacturers in Rockford, Illinois - considered by many the cradle of the machine tool business in the U.S.

I was reminded of that quote when I read "Manufacturer Finds Certification Pays Off" from the Olympian. This story documents the investment in training personnel made by Wisconsin-based manufacturer Federal Tool & Engineering. So, what's the story in that?

Federal won work worth $1.5-million (US) directly due to its commitment to training.

What clinched the recent deal ... was that the customer could have confidence that Federal Tool has at least six employees certified by the American Welding Society to aptly weld a variety of materials of various thicknesses. "Anybody can buy the equipment," says Federal's owner. "We're willing to invest in the people and develop the training."

And what really caught my eye was where Federal is based.

Wisconsin.

It's a familiar theme for manufacturing SMBs in the U.S. Wisconsin just seems to "get it" in regards to growing and protecting its manufacturing base - at least, more than most other states.

"In many ways, Wisconsin is the leading state," Leo Reddy, chief executive officer of the Virginia-based Manufacturing Skills Standards Council, said before a recognition ceremony last month at Federal Tool. Reddy cited Gov. Jim Doyle's commitment to have 40 percent of Wisconsin's manufacturing work force complete at least one component of the certification by 2016. Thanks in part to state grants to technical colleges and workforce development boards, Wisconsin also has one of the best systems for assessing worker skills and providing standardized training, Reddy said.

But one thing that Wisconsin has in common with many other states is something not to be so proud of:

None of the four employees receiving their certificates for manufacturing skills training had received any such schooling before they began factory work. All agreed that what they learned is essential knowledge for manufacturing workers now.

As with most states, "essential training" isn't readily available. What a shame. Add to that the fact that the Federal employees who were certified represented the training they received as high-end in important categories - process/production, puality, computers, communications, math and science, to name a few.

Hmmmmm. Maybe training your people can pay off.

Go figure.

HAT TIP: Kid Rock

In the New York Times this past Sunday, I found a book review that struck me as a balanced take on the true role of large companies in the global economy. The review is of a book that strikes me as a balanced take on the true role of large companies in the global economy.

That's right, I'm recommending a book I've yet to read. Get over it - I ordered it from Amazon already.

The article, "The American Multinational, Unbowed, reviews the book titled "Globality: Competing with Everyone from Everywhere for Everything.



What sold me on the book?

While the consensus is that U.S. (and, I believe, any) multinationals are under serious threat from foreign competitors like Tata or Cemex, the facts are that these behemoths are much more competent and capable than their size or age suggest. The book - via the article - is said to point to 5 core strengths that are often overlooked:

• Human Capital - While most of what we hear is that China and India are creating more engineers and technologists than the U.S., those countries face challenges of extremely high turnover rates, language barriers (most are not fluent in English - only marginally competent), most require further training beyond university, and many indigenous companies can't offer career paths that attract and keep talent.


• International Agility - Conglomerates and multinationals are actually more agile and adept in foreign markets than they're given credit for.


• Mergers & Acquisitions - Western companies have the capital and experience to consistently expand themselves or eliminate competition - much more so than their international competitors.


• Technology Innovation - Again, more capital and experience at functioning openly with other cultures give multinationals the edge.


• Brand Strength - Coke. Google. American Express. Enough said.

The authors sure son't seem to be poo-pooing the emerging challenges from other markets and countries. U.S. manufacturers - especially the large ones - have bureaucracies and administrative layers that can certainly block progress. And these emerging markets are growing at incredible rates of scale.

But many conglomerates have overcome these impediments by learning to do business in the very countries that are seen as challengers. For example, the authors point out that General Motors was the number 1 in China car sales in 2007, and it is beating Toyota in other markets (Brazil, India and Russia).

We don't hear much about that in the mainstream media. That's why I'm looking for good things from this book.

Within the next 5 years, manufacturing in the U.S. will face a major crisis due to both a shortage of skilled labor as baby boomer manufacturers retire, and a limited labor pool from which to find qualified replacements.

So says a recent survey and study from Advanced Technology Services and Nielsen Research, Baby Boomer Retirement Fuels Skilled Labor Shortage in Manufacturing; Puts U.S. Industry in Crisis.

The need to replace these lost skilled workers has grown from a concern to a wholesale crisis in just three short years, according to 100 senior manufacturing executives who were surveyed. They say the shortfall will cost their companies an average $52 million, and even more, $100 million, for the nation's largest companies who report more than $1 billion in annual revenue.

Now, if you're within just a sniff of manufacturing you've heard about or lived this issue first hand. Nothing new here, right?

Wrong.

Q: Forecasts indicate that during the next five years, approximately 40% of your skilled labor force will retire. What do you anticipate the retirement of 40% of your skilled labor force will cost your company in these five years?

A: Eighty-one percent of respondents said they would be affected by the shortage, versus 68 percent three years ago, demonstrating this issue has become of even broader concern to manufacturing executives. Further, they calculate the looming retirement of skilled workers without an adequate replacement pool will cost them an average $52.2 million from their bottom lines, compared with an average $50 million when asked in 2005. And the cost is worse for companies with more than $1 billion in annual revenue, where 44 percent say the shortage will cost them more than $100 million.

What makes this different from everything you've heard over the years is that it looks like the time is here. Another impending crisis, another batch of warnings, and what happens?

We ignore it, shrug our shoulders, and then act shocked - shocked - that it really happened.

Again.

(With that in mind, now might be a good time to revisit 2 Million Minutes and see how you feel.)

And what really makes this a potentially Katrina-like "perfect storm" for manufacturing is the abysmal response of the U.S Government. I mean, do you really need for me to remind you of all the pleading to improve our abilities to educate and/or import a decent labor force in this country?

So, instead of a well-planned, fair set of solutions designed to maintain our manufacturing (and economic) significance, we're all gonna be in a dog-eat-dog bar fight to get the talent we need and any price, all else be damned.

And in the meantime, we'll moan about China being a boogie man for doing what we did to Britain 100+ years ago. We'll point accusing fingers at China for lead paint on toys while Mattel's asleep at the switch.

Looks like all that might be left to this "perfect storm" is to see who we're gonna blame for it.

Anyone in the U.S. with any passion for manufacturing (or technology, for that matter) strongly questions the overall condition of our education system. We're no exception.

But the problems are numerous and solutions complex - there just isn't one magic bullet to fix what ails us. Manufacturing depends on bright, energetic, and curious talent to thrive and allow us to compete.

Heck we all know that, right? But I came upon a post today that really got me thinking about it in a different way.

Over at Grockit, "Schools Make Students Like Factories Make Cars" makes an interesting comparison of how we turn out students with how we make cars.

In the early 1900s, the number of schools in the country was cut in half. Any guesses as to why? This was the mass movement from single room schoolhouses to larger city schools. The idea was that if factories could improve quality and quantity of manufacturing, so could schools. Instead of teachers being facilitators of a classroom where students taught each other, they became the factory worker, the school the line, and the student the car making its way down the line.

The post goes on to stress for education what Demming screamed to the auto manufacturers decades ago - improve quality.

Demming argued that equipment must be constantly checked to be within a tolerance. At the end of the line you get Toyota cars that all work to the same exact specifications with almost 100% quality. The analogy is this. If cars were made like we make students, they would come off the end of the line and some would work and some wouldn't and we wouldn't know where things went wrong. The cars that came off the line non-functional wouldn't be fixed, they would be shuffled off to places where functional cars aren't really needed. Without metrics measuring the delta of a student's learning before and after said 'learning', we are left with a system that shuffles students down a line and out the door. Some work, some don't. Nobody knows where (it) went awry.

I'm still convinced that factors other than the "system" need some repair. And no Toyota will ever conduct the Philadelphia Philharmonic or repair a child's cleft palate. But I haven't heard many solutions lately that make this much sense.