Manufacturing resurgence needs smart supply chain

Restoring America’s competitive edge requires a new approach to managing suppliers, one where all the players are connected, collaborative, and focused on maximizing shared value – a “smart supply chain” – says a new report from MForesight. SSTI spoke with Tom Mahoney, one of the report’s authors and associate director at MForesight, who said that if steps are not taken to move the supply chain in the right direction, or if funding for the Manufacturing Extension Partnership is eliminated as has been proposed in the White House’s budget, the outlook for manufacturing will be poor. Ensuring American Manufacturing Leadership Through Next-Generation Supply Chains, by Mahoney and Susan Helper, provides insight into the current challenges and opportunities facing supply chain management in U.S. manufacturing and provides recommendations for regaining a competitive edge. To be successful, all sectors must take a role – from business to government and educational institutions – the authors contend.

To achieve a manufacturing resurgence in the U.S., the government plays a crucial role, the report outlines and Mahoney echoed. “To maximize the benefits, we can’t allow the market failures to continue,” he said. The existing federal programs that support manufacturers should coordinate their activities based on clear strategic objectives, performance goals, and metrics to maximize return on investment to taxpayers, the report states. Mahoney said that two of the best tools the federal government has are the Manufacturing Extension Partnership and Manufacturing USA institutes, and the report goes on to address ways they can extend their impact.

“We know how to do it,” Mahoney said. “In general, though, we just don’t.”

Mahoney points to the lack of communication in large companies that have many siloes as one of the factors hampering progress in manufacturing. For instance, the purchasing department is driven by finding the lowest price. However, it is more important to get the manufacturing relationships right, Mahoney says.

It may take some trial and error to find the right formula, but there are steps that can be taken, Mahoney maintains. He explains that there should be a strategic plan for supply chain management and a strategy on how suppliers can help the rest of the corporate strategy; management siloes should be eliminated; and, the total cost of ownership, which considers elements beyond a strict focus on low unit price, should be implemented, and additional recommendations are detailed in the report.

“There are bona fide reasons to manufacture in the U.S.,” Mahoney said. “We can see a resurgence of manufacturing if we do it right and don’t screw it up.”

Representatives from MForesight will be speaking on maximizing innovation in manufacturing at the SSTI 2017 Annual Conference, Sept. 13-15 in Washington, D.C. Go to ssticonference.org to register.