the
Box
Companies—and consultants—adjust their
thinking for manufacturing’s new global reality
By Eric Krell
In a sector where consistency and standardization
reign supreme, confusion sparked by a rapidly tilting playing field has thrown a wrench into North
American manufacturers’ game plans.
In other words, these are flush and exciting
times for manufacturing consultants. “
Manufacturing is a growth industry right now,” says Deloitte
Consulting Principal Mark Gardner, who leads the
firm’s automotive and industrial practice.
This growth increasingly consists of a new and
innovative array of consulting engagements, which
“in the old days” (i.e., more than three or four years ago) translated to various efficiency improvements. Although that cost-reduction focus continues, lean manufacturing, Six Sigma and other
process-improvement projects have been joined by a wide world
of new engagements.
Today, manufacturing consultants at Capgemini, Deloitte Consulting, BearingPoint, Bain & Company, Archstone Consulting
and PA Consulting are staving off profit-plundering pirates, powwowing with sales and marketing on branding, digging into
process improvement efforts among client’s suppliers, marrying
supply chain management capabilities to customer relationship
management (CRM) processes and delving into talent management challenges.
Globalization, which has thrust nations of low-cost competitors into the mix, is primarily responsible for most of the pressures bearing down on North American manufacturers—and
much of the confusion that inhibits responses to those pressures.
“Globalization is a big issue but you have to be careful in how
you define it,” notes Eric Schwalm, partner and head of Bain &
Company’s North American industrial goods and services practice. “By globalization, I don’t mean [selling] products around
the world. I mean regional products and sales organizations supplied from a global operating base.”
Schwalm and other seasoned manufacturing consultants say
their top priority is helping North American clients understand
how to plan, compete and succeed in the newly global playing
field that poses significant risks (major cost structure disadvantages) but also opportunities.
“If I’m Hasbro game factory in Massachusetts, why would I
produce games there because it’s so expensive compared to overseas locations?” asks Eric Johnson, professor of operations management at Dartmouth’s Tuck School of Business. “Well, one
reason is because they can exploit ways to capture last-minute
changes in demand, particularly during the holiday run-up …
The question many U.S. manufacturers face is: How do we exploit value of being local?”
The answer is flexibility, which requires significant change.
And that’s a good thing, for both manufacturing consultants and
their clients. “I believe in the long run, U.S. manufacturers really have an advantage in the world,” Schwalm asserts.
Unconventional Wisdom
Helping clients work through their pain starts with correcting
misperceptions. There are a number of them, and they involve
both external forces and internal problems. Consulting firms do
much more than correct misinformation, but today this step
seems especially valuable as manufacturers grapple to address a
