Not all things are better in the US

Editorial comment piece from the April issue of Manufacturers' Monthly.Maybe the US is the most powerful nation in the world, but when it comes to industrial design and manufacturing productivity it is no leader.

I HAVE just returned from the US, only my fourth visit, but once again I was blown away by the contrasts this amazing country has to offer, from its sheer natural beauty to its man-made blots.

That’s an over simplification I know, but from my fleeting visits the importance of design appears to a low priority, especially when it comes to industrial design and engineering. Big is better still appears to be the US’s mantra.

The irony is the US produces some of the best design software in the world.

I was in New Orleans recently for SolidWorks 2007 international user conference and was impressed by the sheer power of today’s 3D CAD systems.

During the three-day event some 3,500 attendees, mainly engineers, were given the opportunity to attend over a hundred different presentations on how to use 3D CAD to design better products.

While the conference was impressive, it was disheartening to hear less than 20% of the potential users in Australia have invested in the technology.

Although comparative to Singapore, and better than most countries in the region, the uptake is way behind manufacturers in the US (surprisingly) and Europe.

Here is a technology that offers manufacturers a ROI often measured in hours, a technology that can reduce a products time to market from months to weeks, a technology that can reduce the amount of raw materials used to make a product, but still retain its strength, a technology that can improve the look and feel of a product, but to date the majority Australian manufacturers are ignoring it.

I understand most people have a balance point in their lives when it comes to making investment decisions; triggered on one side by the pain of something new, set against the pain of the status quo. But with 3D CAD it might be better to be proactive and get a jump on your opposition.

Design, whether its aesthetics or functionality, is so important today. There’s a massive amount of choice out there, and that includes industrial consumers.

As well as aesthetic changes, now with the press of a button, areas such as fluid flow, dynamic motion, simulation, kinematic validation and drop testing can all be measured. (See page 24).

Australian manufacturers should at least consider the technology to see how it can help them. There are numerous suppliers out there willing to show the wide-ranging benefits of 3D CAD.

While I was in the US, one of the national broadsheets, USA Today, had as its cover story an article on US car plants and how unions and management are now working together.

The magazine visited three car plants, one each from GM, Ford and Chrysler, all considered to be cutting edge in the US and all opened in the past six years.

The article waxed lyrically about reduced job classifications, an open door policy, out-sourcing, cutting waste and ergonomics.

The reality is they are doing nothing revolutionary, just following what the Japanese, and Australia, has been doing for years.

Following years of denial, Detroit has now recognised the merits of Toyota’s lean manufacturing technique; the problem is it doesn’t seem to have the stomach to do what is really needed.

Today, Toyota has easily passed Ford and is surging past GM to become the largest and most consistently successful industrial enterprise in the world.

Not all gloom and doom

While the media portrayed Holden’s recent decision to cut 600 jobs from its Wakefield plant in South Australia as another nail in manufacturing’s coffin, the truth is a little different.

True 600 jobs will go, true Holden will scale down production from 620 cars to 520, but, and it’s a big but, production will return to 620 cars by October.

This follows a recent $520m investment to increase productivity at the plant.

It is also true that Holden is not selling as many cars locally as it would like, however exports are the main game these days.

Having wrapped up a deal to ship its Commodore to the US, rebadged as the Pontiac G8, Holden is now looking to export the sedan to Europe.

Denny Mooney, Holden’s chairman and MD believes exports will represent at least 50% of Holden’s business in the future.

While it is depressing to see 600 jobs go, the reality is the increase in productivity will make Holden’s position in GM’s stable even stronger.

It is clear, Australia can’t compete on labour costs with countries like China, but by automating production and reducing the labour component of the overall cost of the end product we can, and should.