What American Manufacturers Can Learn From Henry Ford

Manufacturers must keep up with innovation or risk being outpaced by global competitors.

American manufacturers are competing not only against each other but also against their global counterparts. When it comes to automation, manufacturers don’t have a choice but to invest in new technologies. As history shows, it’s the early adopter who will get the worm.

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Manufacturers that do not take advantage of new innovations are likely to become noncompetitive at some point.

American manufacturing companies need to invest in industrial automation because their global competitors are already taking steps to do so.

Automation critics argue that technology harms workers and industries. But manufacturers are in danger of repeating history when both workers and companies get lost on the global manufacturing stage because they chose to ignore innovation.

Three examples show that the adoption of new technology during times of significant innovation is critical for manufacturers to succeed.

Be first or be last

It should be obvious that if your competitors adopt better methodologies and technology, they may outpace you in the marketplace. Unfortunately, many manufacturers become complacent.

In the beginning, competition can be subtle, but changes can happen rapidly with the addition of better methodologies and technologies.

Consider the ups and downs of the U.S. automotive industry. On Dec. 1, 1913, Henry Ford perfected the assembly line that could produce a Model T in 93 minutes.

Ford’s assembly line had immense influence on the world by dramatically increasing production efficiency, enabling Ford to decrease the cost of the Model T so it fell within the budget of the American middle class.

This ushered in the mass market for automobiles, with Ford’s success dominating and quickly spreading worldwide. Competitors had to implement assembly lines or risk going broke because they could not compete.

Another inflection point in the automobile industry was the success of the Japanese automotive manufacturers attributed to advanced manufacturing methods, aggressive automation and aggressive use of robotics.

In 1960, 48 percent of all automobiles were produced in the U.S., but by 1997 the number was down to 23 percent. This was more than a 50 percent market share loss, with Japan producing 21 percent of automobiles.

During that same time frame, U.S. automakers had access to the same technologies and methods, but they did not take advantage of them until compelled by economic factors.

The lesson? In the early days, Henry Ford was driven to improve operations and develop new technology. Eventually, the U.S. auto industry lost this pioneering attitude and coasted. The Japanese on the other hand aggressively applied new methods and technologies to manufacture more efficiently and with higher quality.

Another example is Andrew Carnegie building his steel-making business to leverage new technologies and processes, such as the Bessemer process in the late 1880s.

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Manufacturers that seek better technology position themselves to become industry leaders.

He installed new material-handling systems, including overhead cranes to speed up the steel-making process. He wouldn’t hesitate to tear out and replace equipment at his mills if a better technology was developed. By 1889, U.S. steel production outpaced that of the U.K.

Innovation is constant

Manufacturing companies need to be on the lookout for innovations to create new value and achieve better results if they expect to benefit from long-term success.

The subtle part of innovation is that many times it is the creative use of current off-the-shelf technology, combined with innovations, that result in significant improvements.

Many times, established suppliers see the disruptive innovations such as new automation techniques as unattractive for a range of reasons and try to ignore them.

Manufacturers that do not take advantage of new innovations are likely to become noncompetitive at some point and be leapfrogged by their competitors.

Conversely, manufacturing companies that go beyond existing suppliers, constantly seeking and analyzing better technology, position themselves to become leaders in their industry.

This article first appeared on GE Reports and was republished with permission.

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Bill Lydon is an automation industry expert, consultant, management coach and author. Lydon is editor of Automation.com & editor of InTech Magazine.

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