Most manufacturers seek to cut costs, a reasonable response to the increasingly tight margins available in all but very few manufacturing enterprises.
There is an alternative, hard to see and act on, but viable.
It involves thinking about the paradox that exists in manufacturing.
As automation has increased, and costs driven down by the reliability of machines doing repetitive work, jobs have not disappeared, but they have changed shape and location. The value added previously by people doing manual manufacturing tasks have moved somewhere else.
Value is a parallel to Einstein’s theories of relativity.
Matter does not disappear, it changes form under some sort of pressure, and moves somewhere else.
Value, similarly, does not disappear, it moves somewhere else. It cannot be destroyed, but when it moves, there are winners and losers. Think about all the value supposedly destroyed by mergers and acquisitions in the last 30 years, very few have lived up to the hype used to justify the change. Shareholders have lost, but those buying assets at less than replacement cost, and those benefiting from the exit of larger businesses have picked up value in many ways.
Again, value has not been destroyed, it has just moved.
If this is true, the task of manufacturing management is not to cut costs, but to extend capabilities.
It seems to me there is a progression happening.
Machines take on repetitive tasks, increasingly more complex over the last 50 years. They are now moving towards cognitive tasks, with the development of AI. It is in its early stages, but the shift appears to be real as I see the evolution. Again, the jobs of people in cognitive tasks will move somewhere else, they will not disappear.
The somewhere else seems to me to be towards social skills, untouched by automation. However, I suspect in 30 years that will no longer be true, but by then I will be gone, and someone else can worry about it.
Unlike the sci-fi of Netflix, this is not an inevitable dystopian outcome, it is a tool that is there to be understood and managed for the greater good.
Business leaders that see the differences and can manage the shape of them will win in the marketplace of the future, others will, well, move somewhere else.
Pity our political leaders seem unable to grasp the idea that change, and commercial evolution is a value adding outcome, that in the long term will be beneficial, while sticking to the status quo, betting the house on it remaining so, is the way to oblivion.
Header cartoon courtesy Tom Gauld in New Scientist.
