Supply chain separation has made engineering a more expensive proposition.
Based on my sailing experience, I can say with certainty a chain, such as the one that anchors your boat to a secure mooring, is only as strong as its weakest link. In the intangible world of business, however, it can be difficult to see differences between “weaknesses” versus “just another way of looking at things.”
Such was the case recently during a meeting with a large customer – the type of very large customer where they have almost as many global facilities as they do egocentric engineering personalities – when an alleged strength revealed itself to be instead the weakest link in a very long chain. Around a large table sat engineering, manufacturing, and quality gurus revealing their latest, greatest project.
Discussion focused on the “elegant” simplicity, the utilization of the “best available new technology” and of course the “time critical” requirement that all suppliers had to perform to. This was quite the humdinger of a program I am sure was going to make – or break – more than a few careers of those present.
April wasn’t a good month for United Airlines. Days after a video showing agents forcibly removing a screaming and bloodied doctor from an overbooked flight went viral, they bumped an engaged couple off an overbooked plane – on the way to their destination wedding.
Then came the flight where, allegedly, a scorpion was found roaming loose in the plane. Management, in PR triage, was certainly kept busy.
The airline business is a tough one. In many ways it is similar to the electronics industry. Much of the costs are “fixed”; significant and ongoing capital investment is required; capacity is constantly changing and rarely predictable, and competition is decreasing as relatively few large carriers vie for the majority of business globally. As tough as the airline business is, however, it appears United’s problems boil down to three simple root cause deficiencies. Those deficiencies cause problems not only for airlines, but for countless other businesses in a variety of industries, including, at times, ours.
All but written off, North American fabs might be on the cusp of a new growth era.
For as long as I have been in our industry, which at this point is decades, the one constant refrain has been that certain technologies, company sizes or geographic locations mean eventual extinction. The technologies in question, just like the company size or geography, have continually changed over the decades. The constant, however, is that much of our industry is, well, just plain doomed!
Currently, the popular thinking is North American fabricators are on the endangered species list. The reasons are numerous. Many survivors are too small to meet capacity demands of global customers, are in a high-cost part of the world and thus noncompetitive with pricing, and lack the technology of newer, more advanced facilities. The general picture painted is North American fabricators are a bunch of bucket shops that can produce only high-mix/low-volume, single- and double-sided product. Commence the funeral march.