NC State of Business

In my recent blog posts, I have outlined several reasons why manufacturing matters. My goal has been to highlight the tremendous importance of manufacturing while plenty of attention seems to be focused on its “decline”. Let me share another reason why manufacturing matters.

The global economy has changed the nature of competition. United States manufacturers can no longer focus solely on being a low-cost producer, rather need to focus on high-value products. Creativity and innovation unlock new customer benefits resulting in higher-value products. Consequently, innovation and creativity have been the center of economic development attention for some time. I recommend an excellent new blog on the topic: Change Papers: A shared effort to change North Carolina's climate for innovation

So, exactly how does creativity and innovation convert into economic value? Let me start with some definitions:

Creativity – the ability to transcend traditional ideas, rules, patterns, relationships, or the like, and to create meaningful new ideas, forms, methods, interpretations.

Innovation – introduction of new things or methods.

Manufacturing – the making or producing of anything especially on a large scale.

Given these definitions, creativity can be viewed as the input into innovations. Transcending traditional thinking and creating new approaches are building blocks to introducing new things to market. While creativity produces new ideas and approaches, innovation applies these ideas in some context. Once applied, if they are product innovations, they need to be produced and reproduced economically. Consequently, manufacturing converts product innovations into economic value. Therefore manufacturing is the key to unlocking the economic prosperity of creativity and innovation.

Creativity, innovation, and manufacturing matter! What are other ways that manufacturing matters? Let me hear your ideas.

I recently learned some staggering statistics.

• In 2007, 400 workers in the US manufacturing industry lost their lives on the job. The leading causes of these fatalities were contact with objects and equipment, transportation incidents, and falls.

• During the same year, 783,100 non-fatal occupational injuries and illnesses occurred, with more than half requiring days away from work, job transfer, or job restriction. The leading causes of these incidents were contact with objects and equipment, overexertion and repetitive motion, and falls.

So how do we reduce these hazards in the manufacturing industry? Two federal agencies were created in 1970 by the Occupational Safety and Health Act with the mission of protecting our workers. The Occupational Safety and Health Administration (OSHA) was created to set and enforce workplace standards and regulations. The National institute for Occupational Safety and Health (NIOSH) was established to help assure safe workplace conditions through research, information, education and training.

NIOSH has established the National Occupational Research Agenda (NORA) for specific sectors of industry, including the manufacturing sector, to move research results into practice to reduce work-related injury, illness and death. The Manufacturing Sector Council has established 10 preliminary strategic research goals based on the noted staggering statistics. Of these 10 goals,

• Goal 1: Reduce number of injuries and fatalities due to contact with objects and equipment
• Goal 2: Reduce number of injuries and fatalities resulting from falls

How can we get the wonderful research that NIOSH has conducted into the workplace to truly make a difference in the lives of American workers? I’m interested in hearing your thoughts.

This is a question that for most people never comes up in conversation. Sure, some of us grow a few tomatoes, plant a few peppers, or maybe tend a small bean patch. Do you know anyone who grows their entire daily menu? Think. Think some more. Anyone come to mind? It has certainly become rare in our society as grocery stores and restaurants have become the norm. Why not grow or raise your own food? Someone in your family tree probably did just that. Today, maybe it is harder? Maybe we like just more variety and options? Maybe it is too much work for our lifestyles? What if we had to go back to individually growing our own?

Why have we trusted others to furnish something that we absolutely cannot do without? Food is not like an 80 inch widescreen LCD television. We can do without the TV even though some sports enthusiast may disagree. Throughout human history, food has been one of the few defining items of each culture. If you stop and think about it, it is pretty scary to think just how little we know about the origins of the foods we consume, what chemicals are used, and a host of poor sanitation opportunities.

Let’s keep the same thought process and switch the topic to your individual business. What are you not doing that is essential to your existence? Are you letting others grow your food? Let me ask another way, do they provide the “value-added” portions of your products or services? Your customers expect more today than ever. Should you be doing more or less? In this time of vast economic hardships facing so many different industries and businesses, many organizations are looking at “growing their own food” again. I am not talking about going “vertical” or building “mega” companies that do it all, simply suggesting that organizations need to take an in-depth look at what their customers feel is valuable and turn their focus and resources into providing that value. I believe that this practice should be done all the time; but, certainly when cash is so tight and business is down. Can you really afford to be spending efforts and resources on waste? If we were really forced to grow our own food, what would you grow? You would certainly put significant thought and research into determining your answer. Now, ask that same question of your organization. What do you need to be focusing on right this minute to be producing food for your business? Please think about it and send me your thoughts.

There is always a level of risk associated with managing projects. Often discussed as individual topics, risk management and project management are now being integrated into general discussions of systems management. More specifically, the new version of AS9100 – Quality Management Systems - Requirements for Aviation, Space and Defense Organizations actually includes specific references to the need for risk and project management processes.

Risk Management

AS9100 (Rev. C) has now added requirements for companies to assess and manage the risks involved with providing their product or service. So what is risk? Risk is that element of doubt you feel when you tackle something new and aren’t quite sure of the final outcome. Risk is defined in the AS9100 standard as “an undesirable situation or circumstance that has both a likelihood of occurring and a potentially negative consequence”. Risk Management consists of defining those potentially “undesirable situations”, assessing their probability of occurring; understanding what the impact may be should the event happen and determining what to do if the risk level is too high. A simple matrix can help you understand the level of risk associated with the products and service your company provides.

Once the risk level has been defined, then you develop action plans to reduce or eliminate the risk. If the risk level is low, you may be able to accept it without taking any action. Understanding and managing risk as it relates to Special Requirements, Critical Items, and Key Characteristics is the intent of the new requirements in the AS9100 Standard.

Project Management

Why add a Project Management requirement into the standard? If you are working on an aviation, space or defense project, you could be working on something that is quite large and complex, involving multiple suppliers or partners and takes place over a long time period. To be successful, these programs should be effectively defined, planned and executed in a controlled manner in order to meet the customers’ needs and expectations. Defining, Planning, Executing, Controlling – are key activities of project management. The new requirements in the standard promote additional focus on up front planning and encourage adequate controls throughout the whole “product realization” process to meet schedules and stay within resource constraints.

The revised audit standard for AS9100 Rev. C has not been released yet, so no companies can be certified to the new C version until the auditing documents are released, which is estimated to be mid-year 2010. What do you do in the meantime? If you are planning to get registered before the middle of next year, you can set up your program to meet the requirements for both B & C versions and get certified to the B version changing to the C version at an audit cycle. If you are already certified to AS 9100 Rev. B. you will need to add these and the other new requirements into your program during the next 30 months or before your next audit cycle if it occurs after mid-year 2010.

What do Mobile Home Manufacturers, Nursing Homes and Marine Cargo Handlers have in common? They, along with 19 other industries, appear on OSHA’s list of industries being targeted for recordkeeping compliance.

In light of several studies suggesting that businesses may be under-reporting workplace injuries and illnesses, OSHA has announced plans to initiate a national emphasis program (NEP) on recordkeeping!In the press release, acting Assistant Secretary of Labor for OSHA Jordan Barab stated that “accurate and honest recordkeeping is vitally important to workers' health and safety” and indicated that OSHA’s plan involves (1) inspecting occupational injury and illness records prepared by businesses and (2) enforcing regulatory requirements when employers are found to be under-recording injuries and illnesses.

According to the directive released by OSHA, inspections will include a comprehensive records review, employee interviews, and a limited workplace inspection. Records that will be reviewed include medical records, worker’s compensation records, insurance reports, and payroll/absenteeism records. OSHA’s Compliance Officers will use information from these records and interviews with staff to independently construct Form 300 Log entries which will then be compared to the recordable case entries on the employers From 300 Log.

Are you confident of what gets recorded? Consider this: At a company-sponsored Pizza Party celebrating your company’s exemplary safety record, an employee burns the roof of his mouth on the hot cheese! Under OSHA 29 CFR 1904 is this a recordable injury? Submit your answers, thoughts and opinions below.