What Skill Sets Do Innovative Manufacturers Need?

In a very interesting article, written by Jason Tuma, Senior Manager, Assurance Services, BCG & Co., the role of training and its importance to a manufacturer’s competitive advantage is discussed.  In the article, the point is made that the future of American manufacturing depends heavily on obtaining the high-skilled employees.  “They are in need of 21^st – century workers with specialized technical training such as machinists, operators, and technicians.”

Tuma concludes the article by saying, “In manufacturing, value no longer is created by manipulating materials, but by engaging employees to deliver exactly what customers want, when they want it.”

While I agree wholeheartedly with his analysis and his argument, I do not believe that it goes far enough.  His focus reflects what I believe is an impediment in many manufacturing operations throughout the U.S.  These manufacturers are product focused.  Their understanding of value is limited to solely to the product that they are producing.  A consequence of this internal focus is a belief that value at the point of production equates to value at the point of consumption.  In this belief, value is a function of the product and product features.  As a result, training is focused on finding skilled “machinists, operators and technicians.”

This leads me to ask, “If manufacturers were market focused, how would the skill sets needed differ from what they are now seeking?”  Tuma correctly points out that “value no longer is created by manipulating materials, but by engaging employees to deliver exactly what customers want, when they want it.”  What do customers want?  They want high quality products at a price that is fair and competitive.  They want value.  If a company is making cheese, customers want the highest quality cheese they can get at a fair and competitive price.  The same holds for tractors, underwear, lipstick, or any other product that is manufactured.  The company that can provide superior value is the company that will be best in market, regardless of what product/markets are targeted.

The issue is, “How do customers define value?”  My experience shows that there is a significant value gap between how manufacturers define value and how customers define value.  Manufacturers take a limited, myopic view of value – one focused on product.  Customers look at the entire value delivery system when they define value.  They include CTQs (critical – to – quality) factors that relate to the sales process, the entire order – to – delivery process, repair processes, product support processes, technical support processes, the invoicing process, and the warranty process.  Customer definitions of value will vary from industry to industry.  The point is, value is a market definition not a manufacturing definition.  Value, if divorced from the market, has no meaning – it becomes an abstraction to be addressed by skilled technicians who may or may not be providing customers with the kind of value they are seeking.

This becomes a pesky problem for many manufacturers who move product to the market through dealers, brokers or agents.  They are critical to the value delivery system but are typically not considered by the manufacturer as part of the value creation and delivery system.  They exist outside of the manufacturer’s world and, in many cases, are an entity that is to be tolerated because of the nonmanufacturing, product related functions that they perform.  The relationship is not one of a partner but rather as a despised in-law who has to be included at the Thanksgiving table, requiring a different management perspective.

I do not see this skill set existing in many manufacturers.  These skills are becoming fundamental to the competencies of winners.  They allow the manufacturer to work smarter and smarter will win in the highly complex dynamics of the global economy.  Value identification, measurement and management are skills that are missing in many manufacturing operations.  And absent the ability to understand how customers define value is like trying to build a product without a blueprint.  Value at the point of production does not translate into value at the point of consumption.  And, it is at the point of consumption where value is evaluated, judged, and chosen.