Reflections of a Leader... Updated

We live in the Information Age. We have Information Technology, Chief Information Officers, Information Security, Information Systems, and an Information Economy. The economy shifted away from the traditional manufacturing base that made America an industrial powerhouse. I remember as a child, while riding in our Chevrolet, listening to the radio and hearing he jingle: “GM, mark of excellence!” GM had over 50% of the American market for automobiles then, and things were good. Here is what Alfred Sloan, Jr., former leader of GM, said in his book, My Years With General Motors:

“It is clear from the events and ideas I have described that my generation had an opportunity unique in the history of American industry. When we started in business, the automobile was a new product, and the large-scale corporation was a new type of business organization. We knew that the product had a great potential, but I can hardly say that any of us, at the beginning, realized the extent to which the automobile would transform the United States and the world, reshape the entire economy, call new industries into being, and alter the pace and style of everyday life.” -- Alfred Sloan, Jr.

Fast forward to 2008... Let’s do a find & replace on this passage, replacing automobiles with computers, and let’s replace new with monolithic. Perhaps Mr. Jobs or Gates will write this some day:

It is clear from the events and ideas I have described that my generation had an opportunity unique in the history of American industry. When we started in business, the computer was a monolithic product, and the large-scale corporation was a monolithic type of business organization. We knew that the product had a great potential, but I can hardly say that any of us, at the beginning, realized the extent to which the computer would transform the United States and the world, reshape the entire economy, call new industries into being, and alter the pace and style of everyday life.

Today, computers and information play a central role in the economy, in business, in the production of goods and services, including automobiles. While GM led the way to building great wealth through large organizations with huge economies of scale, the computer ushers in an age of building wealth through information exchange. Economies of scale come from mass customization, not mass production. Successful, lean manufacturers know this and know how to use information to their advantage.

Lean manufacturers produce what customers order, not what the forecast says. Raw materials are pulled through the manufacturing operation, and oftentimes the supplier gets paid when the final product is completed. Automated replenishment systems ensure outages are a thing of the past. Often the lean enterprise is the only enterprise left, and American manufacturers have that message. But there is an area of lean manufacturing that remains a big problem for American companies, and it ties to information: it is their designs, they aren't lean.

For designs to be lean, they must support the lean manufacturing system. They must aid in automation, build in fail safe devices and features, provide for quick and easy changeovers (part to part, color to color) by being modular, be designed to an appropriate tolerance, and generate the lowest cost product meeting the design intent. Most American designs have a long way to go before they can meet these criteria, as "lean" is considered "just a plant thing" and not for design.

So as multinational corporate design centers open in China and India, I have a prediction. American designs will go the way of the American production: get lean or get out.