What is manufacturing?

A troubling federal government effort is underway to re-define manufacturing. As part of this, many governmental agencies are trying to reclassify scores of factory-less companies as manufacturers. The result will be an almost immediate exponential increase in number of U.S. manufacturers without adding any additional American production lines!

Factory-less goods producers are companies, which handle many aspects of making their products. They range from furniture makers to electronics firms. However, they do not engage in the actual fabrication! As a result, if this reporting change takes place, it would influence countless government figures ranging from the monthly jobs report to the producer inflation figures. For example, the Census Bureau’s survey of businesses, which is performed every five years and asks operational questions of U.S. companies from coast to coast, would count many current wholesalers as manufacturers!

Additionally, a 2013 research paper done by two Tuck School of Business professors estimates if this government redefinition takes place, it will add anywhere from 431,000 to almost two million workers to the previously reported manufacturing sector figures from the 2007 Census survey.

We need more manufacturers not trickier ways of reporting manufacturing. Our manufacturing base has declined steadily over the last several decades. For example, there is only one woman in apparel manufacturing today for every eight female workers from twenty years ago. As I shared in my recent appearance on First Business this is but one of the many manufacturing fields that are contracting especially for women.

President Obama’s new Digital Hub program is a step in the right direction. However, as I shared in my recent publicationhttp://www.recruitingblogs.com/profiles/blogs/digital-hubs-a-good-start-more-lean-manufacturing-investment a lot more needs to be done including offering a lot of Lean and Six Sigma training and expertise at these digital hubs. Neither is as sexy as latest Geomagic(R) perceptual design to manufacturing tools including scan-to-CAD and inspection products that the 3DS is offering the digital hubs, but both techniques have a proven track record in energizing stale manufacturing operations.

Keep in mind that countries that cannot make their own munitions, guns, tanks, ships and planes cannot fight the wars of the future. Especially, with a looming conflict brewing with Russia over their illegal annexation of the Crimea, we need to do everything possible to reestablish our manufacturing base! Not come up with deceitful ways to reclassify non-manufacturing operations as manufacturing.

What are your thoughts?

This content is authored by @scottsargis who runs Executive Search FirmStrategicSearch.com

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