Flexibility, scale and scope are deemed the keys to competing in today’s global manufacturing sector
4/29/2011 - Predicting that economic recovery would lie in emerging markets, international manufacturing and technology firm Emerson has redeployed its assets around the globe.
Thanks to that strategy, the company expects that by 2015, China, the Middle East and Brazil will account for more than 45 percent of sales, Executive Vice President Craig W. Ashmore told attendees April 20 at the 2011 Kellogg Manufacturing and Operations Conference
But shifting the company’s focus to emerging markets also required a shift in perspective.
“It’s about being local in those markets,” Ashmore explained. “It’s about having local teams to think in terms of design, strategy, manufacturing, sales and servicing. The whole value chain needs to be in those markets. Think of building your team that way.”
Ashmore discussed the company’s value creation strategy during a keynote address in line with the conference’s theme, “Seeking the Winning Combination: Strategic Choices in Operations.”
Manufacturers have to strike a balance between operational flexibility and cost, particularly in uncertain times. This challenge was the focus of a panel discussion led by Associate Professor Gad Allon
and featuring Tom Croskey, executive director of global manufacturing strategy and planning at General Motors; Tom Harig, director at The Keystone Group; and Aimee Henkle, vice president of operations at Danaher’s dental imaging group.
Strategic planning during the design phase of products and production can allow for more flexibility down the road, Harig said. Employing semi-permanent skilled temporary workers to meet spikes in customer demand can also improve flexibility, he added. Although all of these measures cost money, panel members agreed that the ability to make cost-saving changes later is worth the up-front expense.
Flexibility, scale and scope are absolutely imperative to compete in today’s global manufacturing space, which is growing exponentially, said Michael L. Ducker ’99, FedEx Express COO and president of the international division, during his keynote address.
“Manufacturing is not dead,” he said. “For the first time in many years, American manufacturing is doing better than the rest of the economy. The growing importance of global trade has fueled the surge in U.S. manufacturing.”
With emerging markets likely to account for 71 percent of American export growth between 2009 and 2014, developing countries are where the action is, Ducker said. But if the U.S. wants to reestablish itself as a manufacturing hub, tax reform is essential.
“Our corporate tax rate is second-highest in the world,” he added. “That has to change if you want to reindustrialize the U.S.”
Other conference highlights included panel discussions on environmental sustainability and global product development, as well as a keynote address by David B. Speer ’77, chairman and CEO of Illinois Tool Works.