The future of Manufacturing needs to focus on consumer needs and changes in technology

by | May 13, 2012 | Blog

In one word – MARKETING – the changes in the market place!
Mass Marketing & Traditional Advertising as a real science were born after WWII to make the ‘masses’ aware of all the wonderful new products being produced by mass production which was beginning to come out of it’s teenage years of the 1920’s. See our 1-Page Marketing History here

In my last rant about the need for manufacturers to manufacture their own future and stop complaining about the things they can not control, my focus was on the need to start taking marketing seriously to remain competitive and relevant, whilst ignoring statistics and market data that added absolutely no value.

Today’s entry focuses on the future and the trends that can not be ignored!
Here’s a typical headline from the last few months, and there is no doubt that as sad as it maybe these sorts of headlines have become and will continue to become the staple of the business pages here in Australia and globally!

“Manufacturing needs more than promises” – an opinion piece from February 10, 2012 in The Age again argues that Australia must keep the skills to sustain economic diversity. The article makes the following points:

  • ALMOST 1 million Australians work in manufacturing, compared with 135,000 in mining.
  • Only retailing employs more people than manufacturing.
  • Decline in the manufacturing sector has accelerated in the past three years, with more than 100,000 jobs lost.
  • Neither the government nor the opposition has given any indication that they see the crisis in manufacturing as more than an opportunity to lash each other.

But is this really a problem and is it the real problem?
Here are 2 great articles that examine the future of manufacturing and the changes this will bring to the workforce and the economy. They are great because they focus on the future instead of the past and they provide ideas on how to best survive in this time of change!

In summary the future is not bleak:
– the government and the industry (employers and employees) need to let go of nostalgia

– “…we still need to MAKE things but the number of people employed to do so will keep decreasing and this is called productivity. Even in China manufacturing jobs are in decline!”

– “…the manufacturing successes in Australia come from niche manufacturers in areas that require high skills and high precision.” Niche is the operative word here! Differentiation through your product offering and marketing communication (branding – how your customers and prospects perceive your offering) are the order of the day!

– “…service industries are more diverse and less tangible. But productive work is productive work. What should it matter if we make a dollar’s worth of tractors or code a dollar’s worth of websites?” Smart manufacturers have realised that the greatest value is in new product ideas, products that solve problems in new and cost effective or convenient ways! They have realised that design and marketing of these products is what actually makes money! And the one thing that can not be replicated quickly and easily is the relationship that you build with your customers! The rest can and will be copied and patents are unlikely to help you for long!

To illustrate the point here’s another quote “Factories used to move to low-wage countries to curb labour costs. But labour costs are growing less and less important: a $499 first-generation iPad included only about $33 of manufacturing labour, of which the final assembly in China accounted for just $8.” Guess where the other costs went? Design, Marketing, Distribution…

– “Offshore production is increasingly moving back to rich countries not because Chinese wages are rising, but because companies now want to be closer to their customers so that they can respond more quickly to changes in demand. And some products are so sophisticated that it helps to have the people who design them and the people who make them in the same place.”

– “The first two industrial revolutions made people richer and more urban. Now a third revolution is under way. Manufacturing is going digital…the applications of 3D printing are especially mind-boggling. Already, hearing aids and high-tech parts of military jets are being printed in customized shapes. The geography of supply chains will change.”

You can read and watch more about 3D printing on Morris Miselowski’s blog (he’s a highly regarded futurist who consults to business leaders around the globe!) http://youreyeonthefuture.wordpress.com/2011/12/04/print-yourself-a-new-hip/

– “The lines between manufacturing and services are blurring. Rolls-Royce no longer sells jet engines; it sells the hours that each engine is actually thrusting an aeroplane through the sky.”

You can learn more about the often ignored and certainly underestimated P of the marketing mix – Pricing by watching this fantastic video http://www.youtube.com/watch?v=YwBkKvGfjRo&feature=relmfu by Jon Manning, a leading Pricing expert who has assembled a global panel of Pricing experts (www.pricingprophets.com) as well as  thought-leaders to help you with the most important decision your business faces: Pricing. Their experts will tell you not only what price you should charge, but more importantly, why you should charge that price. How is that for crowd sourcing?!

– “Like all revolutions, this one will be disruptive. Digital technology has already rocked the media and retailing industries, just as cotton mills crushed hand looms and the Model T put farriers out of work.” The question is – are you manufacturing your future by listening to the market?

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