Friday, November 28, 2008

Self Inflicted Problems. The Finger Trap Of Production Technology

When I was younger I was hired to work in a lighting factory. They had a split “shipping” and “receiving” departments. I was hired to help out in the shipping side. Eventually the orders fell a little flat. No worries, I was sent to the “receiving” side. I had been there before and always looked around in horrified amazement at how in disarray things were. There were 3 and a half people working there. (part time, not an actual half of a person.) The only way anybody knew where anything was is if you were the one who took it off the truck yourself. So bored at the lack of orders coming from the floor, I set to work on laying out an organizational floor plan. Little by little over the course of two weeks, myself and another aggressive individual got the thing in ship shape. It really took the need too have so many people in the receiving department away. So one day me and the other guy are sitting on the doc yappin’ away when in came the plant manager and asked what we were doing. He said something that sounded funny at the time. “We are receivers, we are waiting to receive.” The following week I found myself on the production floor while they waited to see if the trend was going to change. A month later, they sent me packing. For years that receiving doc had been a mess. Had I left it that way, I could have continued being a gainfully employed tax payer for another year or two at least.

Last week the CEOs of the auto industry met with congress and complained one of their flaws was that legacy costs were overwhelming. GM said that they pay 2.5 inactive workers for every active worker. I lived in a town almost entirely populated with Ford, GM, and steel mill employees. Of course there were the doctors, lawyers, teachers gas station attendants, truck drivers and parts manufactures that support the central business.

The problem is that capitalism and free enterprise eventually started to cannibalize itself as the industry advanced. I remember my father raging every time they brought a new robot into the plant to do the job of 10 men. That was 10 men who were no longer consuming. (of course that meant they were no longer buying houses, landscaping, cars, gas, paying taxes, or generally contributing to the economy in a positive manor.) Add in competition for the opening of globalization and ease of moving labor to lower cost areas, and you have a bad economic stew brewing. This problem replicated across the economy. From engineering drawings done in half the time by less people on computers and sent across the ether to the automation of gas pumps. We have capitalism and ingenuity efficiency that is developing ways for less of us to do more work in the same time while we are increasing exponentially in population. What you end up with is 2.5 retired for every one active. My father has been retired from ford for 12 years. He just turned 65 last year.

Have you ever bought an updated version of a product and asked, “That was perfect the way it was. Why did they have to change it?” The reason, engineers are paid to engineer. If they come up with the perfect version of a product, next year they still have to do something to keep their job.

I like to offer solutions. This one is about picking a point in the cycle that you want jump in on and address it. As I have posted before, we have to stop allowing products that the US could make here to be made half way around the world. Also, we need to stand up to the public and say we are no longer going to encourage population growth. In fact the government is going to discourage it.

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