I sometimes get this overwhelming feeling some things are heading backward. Some of that could be age, but regrettably there are times and situations decidedly not related to age, but highlighted by the experiences that have made me age.
Such is the trend currently taking place of customers who insist on verification and validation protocols that seem to accomplish only one thing: increasing the headcount at any and every company that supplies that verification and validation-gone-crazy customer.
Don’t get me wrong. I am all for producing quality product. Earlier in my career I was with a company whose owner early on embraced TQM (Total Quality Management) and all that went with it. The lessons of Deming, Shingo and the concepts of Kaizen, FMEA, value stream mapping, poka-yoke, Kanban, and Lean became our obsession. The result: reducing staff by 25% – mostly by attrition – while increasing sales 30%, mostly via shorter lead times and better quality. Oh, and costs went down too, way down. Yes, two of our organization’s three goals were delivering quality on time. Third and most important, however, was delivering maximum value to customers so we could be more competitive and, therefore, secure increased levels of business from existing and new customers. Continually improving quality and service required an organization to be Lean, efficient, and to reduce unnecessary and non-value-add processes.
A frustrating implementation sheds new light on the value of personnel.
So what exactly is intellectual property?
Talking with an accountant is seldom a fun conversation, but I must admit that when our auditor stopped in for his periodic “kick the tires and see how things are going” meeting, the conversation did open my eyes. What started as a simple “have you invested in any assets this quarter?” morphed into a discussion about what really is value vs. just an asset.
The short answer to his question was, “Yes, we did indeed purchase some capital equipment.” My mistake was trying to anticipate his next question, which I presumed was going to be, “Then why have you not started depreciating it?” My cut-him-off-at-the-pass response was because we were going through a much-longer-than-anticipated learning-curve with the machine and had not put it online yet.
Over the past couple months I have been in several discussions where the demise of the North American fabrication industry has been at the core of the various debates. While everyone in these exchanges was coming from different perspectives, ranging from technologist to financier to global consultant to marketer, and ranging in age from “young bucks” to seasoned retirees, the common thread of their thought process was fabrication as an industry in North America is dead or dying.
Various data points cited – accurate or subjectively interpreted – paint a bleak picture. The number of facilities is down to just over 200, with over half of those facilities under $5 million in revenue. New materials and supplies being commercially introduced are more often than not developed in and/or by Asian companies, and the reinvestment in capital equipment in North America pales in comparison to amounts spent everywhere else in the world. Yes, on the surface the picture is depressing – or is it?
Read more: The Demise of North American Fabrication is Grossly Overstated