National Academies Press: OpenBook

Challenge to Manufacturing: A Proposal for a National Forum. (1988)

Chapter: A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems

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Suggested Citation:"A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems." National Academy of Engineering. 1988. Challenge to Manufacturing: A Proposal for a National Forum.. Washington, DC: The National Academies Press. doi: 10.17226/18604.
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Suggested Citation:"A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems." National Academy of Engineering. 1988. Challenge to Manufacturing: A Proposal for a National Forum.. Washington, DC: The National Academies Press. doi: 10.17226/18604.
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Page 43
Suggested Citation:"A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems." National Academy of Engineering. 1988. Challenge to Manufacturing: A Proposal for a National Forum.. Washington, DC: The National Academies Press. doi: 10.17226/18604.
×
Page 44
Suggested Citation:"A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems." National Academy of Engineering. 1988. Challenge to Manufacturing: A Proposal for a National Forum.. Washington, DC: The National Academies Press. doi: 10.17226/18604.
×
Page 45
Suggested Citation:"A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems." National Academy of Engineering. 1988. Challenge to Manufacturing: A Proposal for a National Forum.. Washington, DC: The National Academies Press. doi: 10.17226/18604.
×
Page 46
Suggested Citation:"A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems." National Academy of Engineering. 1988. Challenge to Manufacturing: A Proposal for a National Forum.. Washington, DC: The National Academies Press. doi: 10.17226/18604.
×
Page 47
Suggested Citation:"A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems." National Academy of Engineering. 1988. Challenge to Manufacturing: A Proposal for a National Forum.. Washington, DC: The National Academies Press. doi: 10.17226/18604.
×
Page 48
Suggested Citation:"A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems." National Academy of Engineering. 1988. Challenge to Manufacturing: A Proposal for a National Forum.. Washington, DC: The National Academies Press. doi: 10.17226/18604.
×
Page 49
Suggested Citation:"A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems." National Academy of Engineering. 1988. Challenge to Manufacturing: A Proposal for a National Forum.. Washington, DC: The National Academies Press. doi: 10.17226/18604.
×
Page 50
Suggested Citation:"A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems." National Academy of Engineering. 1988. Challenge to Manufacturing: A Proposal for a National Forum.. Washington, DC: The National Academies Press. doi: 10.17226/18604.
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Page 51

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A Nation at Risk: Our Eroding Skill Base in Manufacturing Systems Joe H. Mize and Terrence G. Beaumariage The United States has experienced many crises and has thus far been able to respond successfully to the accompanying challenges. Today, the United States is facing a crisis that is fundamentally different from those in the past, and there is no assurance that we will be successful in responding to the current chal- lenges. The crisis facing the United States today (and at least for the remainder of the twentieth century) is that it has lost its position of domi- nance in global competition for the sale of manufactured goods. The evidence is clear. Listed in Table 1 are several industries that were once dominated by U.S. companies but are now dominated by non-U.S. firms. Many of the product groups listed in Table 1 are not manufactured in the United States at all. Many of those carrying American names are actually manufactured abroad and sold under the U.S. label or through a U.S. distributor. U.S. firms in several other critical industries are also experiencing an alarming loss of mar- ket share. The problems of the U.S. automo- bile industry have received widespread pub- licity. Other industries that are being threat- ened include aircraft, computers, gas turbine engines, a wide variety of electronics, and precision instrumentation. For several decades following World War II, U.S. companies were able to compete on the basis of superior quality, lower cost (because of much higher labor productivity), and a significant lead in research and development. Figure 1 illustrates the relative strength of the United States and other industrial nations over much of the twentieth century. For sev- eral decades following World War II, the U.S. had very little competition. Concerns began to surface during the 1970s, when a few observers became aware that many nations were rapidly closing the gap between themselves and the United States in terms of such important measures as labor productivity and per capita gross national product (GNP). A frequent response to such concerns was that we should not worry, be- cause as the other nations closed the gaps, their rate of closure would decrease. They would find, as we did, that incremental gains are much more difficult as the absolute values of these measures increased. Furthermore, as these other nations become more affluent, their motivation to continue improving would lessen, as ours did once we had achieved widespread affluence. Unfortunately for the United States, the other countries were unaware of these "natural laws of economic behavior," and in their ignorance continued striving for improved performance. The story is now clear. In 1986 Canada surpassed the United States in labor productivity, with three other countries now on the verge of doing the same. In 1987 Japan surpassed the United States in per capita gross national product. TABLE 1 Some U.S. Industries That Have Lost Market Dominance Bicycles Binoculars Cameras Castings Clocks/watches Machine tools Motorcycles Radios Robots Semiconductors Sewing machines Ships Shoes Steel Tape recorders Telescopes Televisions Textiles 42 M17.E AND BEAUMARIAGE

Figure 2 shows the approximate relative per- formance of the United States, Great Britain, and Japan over the past 130 years in terms of per capita gross domestic product. Over the period 1870 to 1913, the annual average GNP. growth rate of the U.S. exceeded that of Great Britain by only one percentage point, yet that difference was enough to move the U.S. past the leading industrial power of the nineteenth century (Landau, 1988). Since 1979 the annual average GNP growth rate of the United States has been about 2.2 percent where as that of Japan's has been about 3.8 percent. Although this difference may seem small, over an extended period of time it has a dramatic impact, as shown in Figure 2. In 1987, the output of goods and services for each member of Japan's popula- tion was $19,642 compared with $18,403 for the United States. WHAT "SOLUTION" ARE WE SEEKING? Clearly, the United States is faced with a crisis regarding economic competitiveness. There is no single, simple solution. There is nosingle source or institution to which we can turn for answers. Exactly what "solution," or "answer," are we hoping to find? Does any clear-thinking per- son really believe that the United States ca- nregain its position of overwhelming domi- nance in the world economy? We must be realistic. The forces shaping eco- nomic trends have shifted in irreversible ways. The United States will never again enjoy the unchallenged position of economic dominance that it occupied for some 30 years following World War II. The solution, or answer, we are seeking, therefore, is not how to regain dominance but how to avoid falling from the ranks of the leading economic powers. We should not be disturbed by the prospect of being one of several leaders. Indeed, we should be somewhat relieved that other na- tions are becoming economically strong enough to assist us in providing economic and defense assistance to developing nations. What we should be disturbed about are the persis- tent signs that we may be losing our ability to remain competitive in an increasingly discrimi- nating world marketplace. FIGURE l Manufacturing capability of the U.S. vs. other industrialized nations. Other Industrialized Nations 1920 1940 1960 SOURCE James J Solberg, Purdue University 1980 2000 FIGURE 2 Approximate relative performance of three global competitors. United Slates United Kingdom 1860 1880 1900 1920 1940 1960 1980 I 2000 1988 A NATION AT RISK 43

ARE WE UP TO THE CHALLENGE? What will be required for the United States to reverse its decline relative to the leading in- dustrial nations? Lester Thurow (1985) has said, "In many way what is needed is the moral equivalent of defeat" to cause us to take the difficult steps that will be needed across all segments of U.S. society if we are to correct our deficiencies and remain among the economic leaders of the world. The United States has always responded well to crises. In fact, it can be argued that this national characteristic is both our greatest strength and our greatest weakness. We are basically a nation of problem solvers. We would be wise to shift our emphasis to problem prevention. We tend to allow prob- lems to grow to crisis proportion before we respond, and then we too often overreact for a short period of time and fail to sustain the gains that were made. Consider the U.S. space program. This pro- gram was underfunded until we were shocked when the USSR launched Sputnik in 1957. We then marshalled our resources and spurted far ahead of the Russians for a few years. The Apollo Program successfully took Americans to the moon and back by 1969, only 12 years after Sputnik. The U.S. lead in FIGURE 3 U.S. capabilities in space: Actual performance vs. alternative strategy. 3 a Actual i \ 1 955J 1 1955 I 1960 1965 1970 1975 1980 19851 1990 1995 2000 Sputnik Challenger Explodes space seemed insurmountable. Hundreds of thousands of highly skilled engineers, scien- tists, technicians, and technical managers formed a technical force the likes of which the world had never seen (and may never see again). Today, two decades later, we have difficulty conducting routine launches. This situation is portrayed in Figure 3, along with a dashed line that shows where we might be today if we had pursued a long- term, steady-state strategy regarding our space program. Again, we seem to prefer crises to stable programs. The reward structures within individual com- panies also reflect the crisis mentality. Prob- lem solvers are rewarded as heros, while problem preventers have difficulty selling their conceptual ideas to management. Con- sequently, our large discrete-part manufactur- ing plants are still run by armies of expediters who storm through the factory with "hot lists," playing havoc with the shop schedules that had been carefully constructed by the problem preventers. Guess who receives the highest rewards? WE DO NOT NEED ANOTHER CRASH PROGRAM Too many of the "solutions" being proposed to the United States competitiveness problem are simply additional products of our collec- tive national mentality favoring crash pro- grams, or quick fixes. Crash programs are necessary to respond to events such as wars, natural disasters, and disease epidemics. They are invariably counterproductive for long-term, fundamental activities. After the euphoria is gone, they simply cannot be sus- tained over long periods of time. On rare occasions, the United States has shown that it is capable of conceiving and sustaining long-term initiatives. A specific example is the land-grant university system initiated around 1860. The Agricultural Extension Service has been well funded for more than a century. The results have been nothing short of astounding. In fact, the entire system of higher education in the United States is the envy of the world. Another example of a successful long-term initiative is the National Science Foundation (NSF). Scientific and engineering research has 44 M1ZE AND BEAUMARIAGE

been funded on a sustained high level for several decades. Many other countries have attempted to model their science mechanisms after the NSF, but none has achieved the same degree of success. FRAMING THE ISSUES There are many dimensions to the set of is- sues that must be addressed in order for the United States to retain its competitive posi- tion in world markets. It is advantageous for the present discussion to classify the issues into two groups; those over which individual firms have full discretion and control, and those that are outside the control of individ- ual firms. Table 2 lists several major issues in each category. Many of the issues external to individual firms are discussed in the accompanying briefing papers by the other three authors. For the remainder of this paper, we will re- strict our attention to some of the more criti- cal internal issues which we believe must be addressed. Again, by "internal issues," we mean those things that each U.S. manufactur- ing company must address on its own, and over which it has essentially full control. FUNDAMENTALS OF COMPETITIVENESS All the factors of competitiveness listed under external issues in Table 2 will affect all U.S. firms equally at any particular time. All firms have access to the same work force, face the same tax structure, and have the same access to fundamental scientific breakthroughs. Given a particular set of external conditions and factors, the competitiveness of an indi- vidual company is determined by how it addresses the internal competitiveness factors listed in Table 2. A company's competitiveness is determined by how well it meets the needs of the market relative to other companies competing in the same market. There are only four fundamen- tal ways a company can improve its competi- tive position in a given market: • Lower the cost of the product. • Improve the quality or functionality of the product. • Improve customer service, e.g., schedule performance. • Differentiate the product line. TABLE 2 Issues Affecting Global Competitiveness of U.S. Finns Issues Internal to Individual Firms Issues External to Individual Firms Commitment to excellence Responsiveness to market dynamics Product development/design Climate lor Innovation Process development/design Capital investment Strategic management Operational management Personnel developmenftraining Reward problem preventers Return on assets, long-run Quality of education in work force Production vs. consumption incentives Tax structures Basic research infrastructure Equal access to world markets Industry-wide technology transfer mechanisms Regulatory climate Broad, sweeping social changes Fundamental scientific breakthroughs These four factors are the superordinate key result areas for any manufacturer. There are several subordinate key result areas, such as productivity and return on assets. Each of the internal factors listed in Table 2 can be associ- ated with one or more of these four generic key result areas. It follows, then, that the U.S. industries listed in Table 1 that have lost market share per- formed relatively poorly on the four generic key result areas of cost, quality, service, and differentiation. Our major concern at the pres- ent time is to determine how current U.S. firms can maintain or improve their competi- tive position through continually striving to improve their performance on the four ge- neric key result areas. Life would be simpler and easier if a com- pany could concentrate on one or two items to improve its performance. Unfortunately, the real world of manufacturing is very com- plex. A company's competitive position is im- proved whenever a worker discovers a way of reducing set-up time by three minutes; when an industrial engineer rearranges the work flow to increase manufacturing velocity by 7 percent; when a design engineer reduces a subassembly from 17 discrete components to 12; when a purchasing agent concludes an agreement with a vendor to place orders elec- tronically; when the quality control depart- ment certifies the manufacturing process of a A NATION AT RISK 45

vendor to eliminate incoming inspection; when a new computer system is installed, permitting a significant increase in data accu- racy; when a robotic paint-spray cell is in- stalled to achieve uniform coating of paint. The list is essentially endless. It is clear that the "competitiveness battle" will be won (or lost) by individual companies doing (or not doing) a wide variety of things required for continuing, never-ending im- provement. Far too many U.S. managers are desperately groping for "the secret" of manufacturing competitiveness. There seems to be a collec- tive national mind-set that slogans, gimmicks, and fads will prove to be "the answer" to all our problems. The only "secret" is that there are no secrets. Improved performance on cost, quality, serv- ice, and differentiation is the cumulative re- sult of long-term relentless efforts to improve performance continually in all areas. To be successful in such efforts, a company must understand and practice the fundamentals of systems improvement. Athletic teams win national championships by flawlessly execut- ing the fundamentals time after time. Na- tional championships are never won with trick plays, slogans, or gimmicks. Similarly, the "secret" of Japan's success is not that it has implemented robots more widely than in comparable U.S. firms, but that it has a better understanding of the fundamentals of manufacturing competitiveness and the disci- pline to achieve flawless execution those fun- damentals repeatedly. Even among those U.S. firms who are aggres- sively modernizing their companies, there are many managers who are under the impres- sion that they are engaged in a one-time, dis- crete initiative, with a recognizable comple- tion state (and date). It will not be that way. Factory and company modernization must be recognized as a con- tinuous, ongoing process, with between 20 and 30 percent (depending on the industry) of all processes and systems being replaced an- nually. While a company is implementing major changes, its forward planning group should already have a fairly concrete idea of even more advanced systems that will replace those being installed today. CAUSES OF WEAKNESS IN U.S. MANUFACTURING FIRMS To regain and retain global competitiveness, U.S. manufacturing firms must learn to do certain things better than they are now doing them. Al- though the list of needed improvements is quite lengthy, we will focus on what we be- lieve are among the more critical ones. • Better product design More functional Higher quality More reliable (fewer parts) Less expensive Designed for manufacturabiliry • Automated handling/transport • Automated loading/unloading • Automated inspection test • Automated packaging More modular, for alternative configura- tions More use of design retrieval Requires aggressive, sustained effort in product R&D • More responsive to market Faster to market • New products • Upgraded products Design for international markets Service after the sale Obsession with customer satisfaction • Better process design (entirely new concep- tual paradigms for performing process de- sign/redesign) Process design in parallel with product design (parallel engineering) Better use of advanced process technolo- gies Processes designed for programmable reconfiguration Concept of generic manufacturing systems (within broad process categories) Faster development to production time; first article, acceptable quality requires aggressive, sustained effort in process R&D MIZE AND BEAUMARIAGE

Better strategic management Ability to visualize the future • Markets • Megatrends (environmental forces) • Global factors Ability to target opportunities, aggres- sively define, create, and capture appropri- ate markets Ability to capitalize on and influence emerging technologies • Materials • Processes • Devices (e.g., mechatronics) • Basic sciences Ability to capitalize on and influence emerging conceptual developments • Information management processes • Statistical treatment of data for control- ling/managing processes, departments, functions, vendors, and people • Organizational dynamics • Motivational concepts • Individual/group behavior • Knowledge-based processes • Object-oriented programming and mod- eling Ability to conceptualize and continuously reinterpret long-term transition paths for their entire corporations (corporate war- rooms) Ability to comprehend entire corporation as a dynamic system, with many interact- ing functional components, the total per- formance of which must be optimized over the long term Better Operational Management Linking strategic planning to operational action Ensuring consistency and congruence be- tween strategic business goals and operational programs. Configuration management applied to the design and operation of the operational management system • Data integrity • System discipline • Accurate, updated system documenta- tion • Observance of boundaries (limits) in loose/tight management policies Reward structures congruent with desired system performance "Control room" approach to production management (digital readouts; cause-effect mapping) Managing continual change/moderniza- tion Possible shift from hierarchical to network organization, with accompanying modifi- cations to accountability/responsibility/ authority relationships THE NEED FOR A SYSTEMS ENGINEERING PERSPECTIVE If the Japanese have a "secret" regarding their approach to manufacturing competitiveness, it is their ability to perceive their company as a dynamic system. They understand how all the functional components of their companies interact to influence the firm's performance on cost, quality, service, and differentiation. Furthermore, they know how to engage in "organizational experimentation," in which they change system parameters (such as the size of their engineering design staff) in an ongoing attempt to optimize the total per- formance of the firm over the long term. The Japanese do not like to take risks. When a Japanese manager makes an investment deci- sion, he is not simply "rolling the dice" hop- ing that his firm's performance will improve. Most likely, the decision was thoroughly tested and evaluated through the use of quan- titative and qualitative models of his firm. The term "systems engineering" is used to characterize the rational approach to organ- izational performance improvement de- scribed above. The concepts and methodolo- gies of systems engineering originated in the United States, primarily in connection with defense and space programs. It was the Japa- nese who saw the applicability of these con- cepts to the design and operation of industrial firms. It has been observed that if Boeing designed airplanes as U.S. firms design companies, the airplanes would never get off the ground. If airline pilots attempted to fly their routes as U.S. firms operate and manage their compa- nies, they would rarely have a successful flight and would almost never arrive on time. A NATION AT RISK 47

FUNDAMENTAL NEEDS FOR IMPROVED COMPETITIVENESS If U.S. manufacturing firms are to improve their performance, there are some prerequi- site, fundamental needs that should be ad- dressed. • Need for a new paradigm for manufactur- ing system analysis, design and operation Systems engineering approach • Inputs • Transfer functions • Outputs • Feedback control loops Designing system for accommodating external and internal perturbations • Responsiveness • Flexibility • Fault tolerance • Robustness • Need for new, improved methodologies for analyzing, designing, and operating advanced manufacturing systems Better methodologies for functional analysis Better methodologies for analyzing, and characterizing current system • Identifying cost drivers • Measures of performance • Comprehensive, integrated, forward- looking total cost models Better methodologies for designing new, improved manufacturing systems • Need design principles and guidelines • Need computer-aided tools for aiding manufacturing system design engineers in conceptualizing new designs, performing "finite element analysis" equivalent, and even animating the factory design Better methodologies for operating manu- facturing systems • On-line, real-time simulation model to facilitate "what-if" decision making • Knowledge-based decision support tools • Need for a science base for manufacturing system design on which to construct the new, improved methodologies Manufacturing system theory Theory of integrated systems Theory of system rationalization • Need for a greatly increased capability in U.S. universities to produce engineers pre- pared to contribute to companies' efforts to improve their manufacturing capabilities • Need for much better mechanisms to net- work the capabilities of manufacturing spe- cialists, so that large multiplying effects can be realized for rapid dissemination and im- plementation of emerging concepts in ad- vanced manufacturing systems • Need for much broader understanding among U.S. manufacturing managers that it is just as important and critical to invest in new, improved process design as it is in new, im- proved product design; and that they should attempt to recruit and develop the same top level of manufacturing engineers as they do product-design engineers SUMMARY During the decade of the 1970s, U.S. manag- ers and policymakers convinced themselves that we were experiencing temporary forces in the international market place, and we refused to acknowledge that we were losing competitiveness. The 1980s convinced us that, indeed, the competitiveness of U.S. firms is weakening, and we desperately sought the "secrets" used by the Japanese. Thousands of U.S. managers participated in industrial tours to Japan. Americans are not very good listeners, we do not prepare well for these trips, we do not really know what to look for, and we often misinterpret what we see or what we are told. We wildly embraced "participative manage- ment," "total quality," "just in time," kanban, etc., viewing them as quick fixes that can simply be plugged into our company struc- tures in the United States. Without having a clear, rational understand- ing of how our companies function as com- plex systems of interacting components, it is not surprising that a very large majority of initial efforts to implement "Japanese man- agement techniques" ended in dismal failure. There is no easy path or shortcut to achieving world-class manufacturing competitiveness. We all have much to do in the decades ahead. 48 M/ZE AND BEAUMARIACE

There is a major role for each of the three sectors of industry, government, and educa- tion. These roles are described in the follow- ing section. FIGURE 4 Interdependencies of initiatives of three major sectors regarding restoration of U.S. competitiveness. RECOMMENDATIONS The three major sectors that can impact U.S. competitiveness are industry, government, and education. Figure 4 illustrates the inter- dependent nature of initiatives in each of the three sectors. Each of the sectors can and should embark on independent initiatives. For example, it is the responsibility of the federal government to ensure that U.S. firms are competing on a relatively "level playing field" in interna- tional trade. It is the responsibility of higher education to provide the proper international perspective in curricula requirements. It is the responsibility of each industrial firm to en- sure that the fundamentals of world-class manufacturing are executed flawlessly on an ongoing basis. Joint responsibilities between sectors are re- flected in the intersections shown in Figure 4. Many of the potential initiatives for restoring U.S. competitiveness will be those that reflect a joint dependency among two or more of the sectors. Education-Government Initiatives Basic research related to greater understand- ing of the fundamental principles of manufac- turing systems engineering should be greatly expanded. Applied research related to the development of improved manufacturing system design methodologies also needs to be greatly ex- panded and accelerated. The applicability of systems engineering tools such as feedback control theory needs to be explored through a focused, well-orchestrated research initiative. To address the shortage of engineering faculty members in manufacturing systems engineer- ing, a long-term, multifaceted program should be designed, implemented, moni- tored, and modified as needed. This program could encourage promising graduate students to pursue advanced study in manufacturing systems through government-funded supple- mentary grants. Current faculty members could be "retreaded" through intensive sum- mer programs at selected universities, with industrial interaction a required feature of the program. Practicing engineers having masters degrees could be encouraged to pursue doc- toral programs through government-funded supplementary grants. The grants could re- quire two years of university teaching for each year of the grant. Industry-Education Initiatives Industry should greatly increase it participa- tion in engineering education. The two most obvious mechanisms currently existing are the American Society for Engineering Educa- tion (ASEE) and the Accrediting Board for Engineers and Architects (ABET). Another mechanism that has worked excep- tionally well where it has been used in indus- trial advisory boards for colleges of engineer- ing and for individual engineering depart- ments. Greater emphasis needs to be placed on sum- mer or year-long industrial internships for A NATION AT RISK 49

engineering faculty, and on summer or year- long educational sabbaticals for practicing engineers. Increased use of industrial equipment and laboratories by university faculty members and graduate students should be encouraged. In specific industries, research consortia, such as Electronics Research Corporation and Sematech, should be encouraged to provide needed funding for focused programs of R&D conducted at several participating universi- ties and research laboratories. Exchange programs (of faculty and engineers) between universities and industry should be encouraged for the mutual benefit of both parties. Similarly, greater use of qualified adjunct professors and adjunct researchers from industry should be encouraged. Industry should be encouraged to be more willing to provide coded data regarding their experiences in manufacturing initiatives, as a basis for meaningful case studies. In this re- gard, companies should be encouraged to be more willing to disclose their failures, so that others may benefit from their experiences. Greater "teaming" of specific university fac- ulty members with specific industry engi- neers should be encouraged through appro- priate mechanisms. For example, many tech- nical journals now give additional weight to articles authored by such teams. Likewise, university reward structures should be en- couraged to recognize the inherent value of technical papers that contain practical elements. Industry-Government Initiatives Increased use of high-level industry/govern- ment task forces to explore means for increas- ing the competitiveness of U.S. firms is needed. There needs to be consciously conceived ini- tiatives to develop a better understanding of the effects of government actions on U.S. competitiveness. Greater interaction and cooperation between industry and the federal laboratories should be encouraged. Better mechanisms should be developed to demonstrate and convey to industry the potential benefits of using the inventory of fundamental knowledge resid- ing in our federal laboratories. Consideration should be given to expanding programs that conduct long-term R&D initia- tives by combined teams of researchers from several companies. Such programs would necessarily be restricted to those research initiatives having high potential payoffs but whose high costs and risks are greater than individual companies are able to consider. There is a need to explore innovative funding mechanisms that would earmark some of the profits realized on successful programs to be used in funding subsequent programs. Such a bootstrapping mechanism would alleviate the need to depend on general revenues to sup- port these expensive initiatives. Industry-Education-Government Initiatives Perhaps the most fruitful initiatives for im- proving U.S. competitiveness will be those in which all three sectors—industry, education, and government—participate. Many such ini- tiatives are already under way, and should be monitored, modified, expanded, or dis- banded as appropriate. Some of the existing industry-education-government initiatives are: • Engineering research center programs at the National Science Foundation • Industry/university cooperative research center program at NSF • Energy analysis and diagnostic center, De- partment of Energy • Cooperative initiatives among federal labo- ratories, universities, and industry An initiative that is just being launched origi- nated in the National Bureau of Standards and is intended to encourage technology transfer to manufacturing firms. It is recommended that consideration be given to a carefully conceived initiative to develop a better understanding of how "America, Incorporated" acts as a system in the context of a complex world economy. Some version of "industrial experiment sta- tions" and "industrial extension services" should be conceived and implemented on a trial basis. There are a few successful state- level systems (such as the one at Georgia 50 MIZE AND BEAUMARIAGE

Institute of Technology) that could be used as prototypes and as examples to learn from. It is realized that such a program implemented on a national scale would be extremely ex- pensive. Only the overwhelming success of such a model in agriculture gives impetus to the concept of even considering such an un- dertaking. A more modest initiative is one that would provide opportunities for industrial intern- ships for faculty members on a regular, recur- ring basis. This could be combined with an industry-education-government initiative to capture the talents of many retiring (but still young) practicing engineers for service in manufacturing curricula. An earlier section in this paper is entitled "We do not need a crash program." Some of the recommendations cited above may sound like "crash programs." They are not meant that way. The strong belief that we Americans must move away from our crisis mentality is reiter- ated. We should decide what is needed for long-term competitiveness and then have the discipline and resolve to pursue long-term initiatives that focus on fundamental needs. Trick plays will not help us regain our com- petitiveness. Dedication to continuing im- provement in the way we design and operate our manufacturing firms is our most promis- ing strategy to pursue. Our future as an in- dustrial power depends on how well we exe- cute the basics time after time, year in and year out. Joe H. Mize is Regents Professor and director of the Computer Integrated Manufacturing Research Center at Oklahoma State University. Terrence G. Beaumariage is a research assistant in the School of Industrial Engineering at Oklahoma State. References Cohen, Stephen S., and John Zysman. 1987. Manufactur- ing Matters. New York: Basic Books. Landau, Ralph. 1988. U.S. Economic Growth. Scientific American 258 (6)(June): 44-52. Solberg, James J., et al. 1985. Factories of the Future: Defining the Target. Computer Integrated Design Manufacturing and Automation Center, Purdue University, West Lafayette, Indiana. Thurow, Lester C. 1985. The Zero Sum Solution. New York: Simon and Schuster. A NATION AT RISK 51

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