On American Manufacturing

I came across an interesting article in The Economist about the president, chairman and CEO of Dow Chemical, Andrew Liveris, and his views on reviving American manufacturing. Liveris, who studied chemical engineering at the University of Queensland before joining Dow Chemical, published a book earlier this year entitled "Make it in America: the case for re-inventing the economy".

In the book and the interviews he has given surrounding its publication - see for instance NPR and Knowledge@Wharton - he advocates for a move toward advanced (as opposed to basic) manufacturing, to exploit the current trends of "clean energy, health and nutrition, rising consumerism in emerging markets and investment in transport and infrastructure."

Here is a quote I found particularly interesting, from the NPR transcript: "outsourcing based on wages has really become the storyline of manufacturing, and I think that's wrong. It is more complicated than that. Take Dow as an example. We built this R&D center in China. We now have 500 Chinese scientists working there, and they earn incredibly good money."

His plan to improve America's competitiveness in manufacturing has the following high-level components:

• train more engineers,
• attract more foreign talent ("over 1m jobs in science and technology will open up in America this year but only 200,000 new graduates will have the skills to fill them.")
• promote clean energy,
• reduce costs to do business in America, in particular through a decrease in the corporate tax,
• make the research-and-development tax credit permanent,
• offer tax advantages to companies that build plants in the US.

He further describes his plan in an op-ed he wrote for USA Today last year. He has certainly promoted advanced manufacturing at Dow so far, with the opening of new factories in Michigan such as one making lithium-ion batteries (a family of rechargeable batteries), which has led to the creation of nearly 2,000 jobs. 

The Economist writer points out that "America [already] offers many subsidies fror manufacturers. Dow has had hundreds of millions of follars from local, state and federal taxpayers" and wonders whether taxpayers benefit from this arrangement.

A commenter to the Economist article (neil_dr) points out: "His proposal to reduce tax and increase the number of immigrant would help his organization with lower taxes and cheaper labor cost but how will it benefit other Americans ? The unemployed labor force will never have the opportunity of getting re skilled as the availability of immigrant labor would make that unnecessary."

But there is little doubt that a strong manufacturing sector is important for a healthy economy. 76% of Economist readers who participated in a recent debate on the publication's website voted that "this house cannot succeed without a big manufacturing base".

Comments

[Fbahr]

Oh, yes - those fabulous lithium-ion battery factories. 2,000 new jobs in Michigan. Great. But...

> http://en.wikipedia.org/wiki/File:Rareearth_production.svg
> http://en.wikipedia.org/wiki/Rare_earth_element#Reserves

So, maybe mining, recycling, chemical engineering are - at least - of equal importance to manufacturing.

[Ilyaquant.wordpress.com]

Ehhh...depends on how specialized he's looking. There are definitely grads out there who have some form of STEM skills and are certainly willing to use them--for the right price, of course.

After all, why would a new grad go to work in manufacturing when they can go into consulting/market research/finance/internet web analytics and make a lot more?

If there was something exciting worth manufacturing (EG green energy innovation), you bet I'd jump all over that. (So if you know of a green energy startup looking for a statistics grad, drop me a line =P)

[Erik K]

Like so many people with a plan for American manufacturing, Mr. Liveris does not show evidence of knowing precisely how to implement his ideas. What is REALLY needed to train engineers and others to actually make innovative products work in the real world?

I think what is really needed is helping practicing engineers, and graduating engineering students, to gain broad manufacturing hands-on knowledge. That would enable those engineers to spend less time figuring out the basics and more time on making their product/process more green or nanotech or otherwise advanced.

I have an idea that could really help accomplish that. Implementing this idea would greatly enhance employers' ability to find qualified engineering talent, and help the U.S. economy in general. Both the Republicans and Democrats are under a lot of pressure to do something for private industry job growth, and this would almost certainly help do that.

My idea essentially is to create one of the conditions, for manufacturing, that exist in the American software industry: ease of market entry and innovation. Having low barriers to entry has worked reasonably well for the US in software. I'm guessing that it would also work well for small scale manufacturing.

My idea would reduce barriers to innovation and quality for American companies.

We need a national program that walks mechanical and manufacturing engineers through design and manufacturing case studies, with hands-on experience with a variety of manufacturing processes.

I wish I could have participated in such a program when I graduated college. My mechanical engineering university education was much too theoretical. Frankly, that limits my ability to do real-world design engineering, and I suspect that all graduates face this problem.

Undergraduate engineering degrees are professional degrees in reality, if not officially. Other professional schools (e.g. law, business) use case studies, but engineers are expected to function without the benefit of a similar collection of experience. This must change.

Unlike software engineering university programs, mechanical engineering curricula typically offer inadequate chances for hands-on learning. I'm guessing that's due to the cost of equipment, energy, materials, real estate, and liability insurance.

There was/is a TV show on the Discovery Channel called How It's Made. Have you seen it? If so, imagine actually visiting the factories they show, instead of watching it on TV. Imagine being coached and doing each step of the process, single-handedly manufacturing the product as much as possible. That's basically what I'm looking for, for the manufacturing part of the training anyway. A discussion of the history and evolution of that process would be a really helpful addition, to understand why the process is set up the way it is.

It seems unlikely that private enterprise factory owners would permit students to actually handle their equipment. They sometimes will allow factory tours, but that's not enough. Also, I suspect that few, if any, universities could afford to maintain their own sets of factories. If I'm right, then this makes it very difficult for people to get the broad experience that would make them highly effective innovators.

We need one separate educational organization, funded by the U.S. government. That organization should purchase appropriate factories or equipment, and move them to suitable locations. It then would take American graduates and students from any U.S. university, and let students visit the factories that interest them. Each student would be trained to do each step of the manufacturing process.

Beyond that, the ideal institution I'm envisioning would also have physical specimens of various devices or parts, some being exceptionally well designed and some having flawed design. Each item would be accompanied by discussion of its history and the decisions that led to the design.

Likewise, describing examples of exceptionally good and bad manufacturing processes would be very enlightening.

Where applicable, students should also see examples of finished products that are very easy to maintain, as well as some that are difficult to maintain. That way, they learn how to make an easily maintained product.

I don't believe anything like this exists. I've been searching, and I haven't found anything remotely like it.

I already emailed this idea to my Congressman (Brian Bilbray) with no response. I also emailed ASME and the Society of Women Engineers; they replied, but they had no ideas for how to proceed.

I have no idea about how to really get the attention of the right people in government. I've already tried, without success.

I lack the management and leadership skills needed to create the program, so I cannot apply for a grant from a foundation. Otherwise, I would be tempted to do that!

[Aurelie Thiele]

Erik,

Thanks so much for commenting. Sorry I didn't get to approve your comment earlier. I was away from my email for a few days.

You make very valid points. While universities have tried to make undergraduate education more closely connected to real life through the use of projects, especially capstone projects, professors don't always have the recent practical experience that would allow them to give their students applied (rather than theoretical) engineering skills. It's a pity because it's much more acceptable for students to fail rather than practicing engineers. If the students haven't learned this knowledge before they graduate, it is also much harder for them to acquire it on their own.

I think the program that is closest to what you describe is the Leaders for Manufacturing program at MIT, but it's a joint MS/MBA program that requires significant prior work experience. A few years ago it was even renamed to Leaders for Global Operations. It is unfortunate that manufacturing has now such a negative connotation of "thing of the past".

Industrial engineering departments have traditionally had good relations with local manufacturing companies, which tend to hire their graduates. Maybe a good starting point to implement your idea would be to create a pilot program at a top IE/manufacturing department, maybe with a co-op. Alternatively, a (well-constructed) rotation program for entry-level hires out of college could allow specific companies to give their new employees some of those skills. My advice would be to start small to build a track record before trying to extend it at the state or federal level.

I love your point about needing more case studies in engineering education and allowing students to see flawed designs as well as successful ones. Overall I feel that engineering education in general and manufacturing education in particular would benefit from a more tightly-knit connection with engineering/manufacturing companies. You could ask ABET (www.abet.org), the board in charge of accrediting undergraduate degree programs in engineering departments, if they know of departments that implement such practices. ABET highly values the integration between industry and academia (making sure students learn skills that later make them productive members of the workforce) and should be receptive to your ideas.

Thanks again for commenting!