Evolving Excellence

Domestic Fangs

The business "section" of my local small-town newspaper has a regular feature that updates the status of previously featured local companies.  Those featured companies, by the way, have convinced me that there's a market for anything.  Organic dog biscuits, realistic eyeball covers for the deceased... you name it. 

And now, just in time for Halloween, vampire fangs.

A local (Grover Beach) company is doing over a million bucks a year making costume fangs.  And here my partners and I struggled for a couple years earlier this decade building a specialty contract manufacturing company focusing on high-end robotics.  Oh well.

Linda Camplese and her husband, Arthur Goldiner, own Scarecrow Inc., a million-dollar business that manufactures vampire fangs for the costume industry. The pair launched the business in Grover Beach in the early 1990s after Camplese discovered there were no quality costume fangs on the market. She started making the fangs for extra money, but demand for the fangs took off and she began manufacturing them by the thousands. Last year, she sold more than 200,000 pairs.

But there's more to this particular story.  When the company was first profiled last year, Camplese was dealing with the problems of growth.  She had a vision for her company, and it did not include concepts that most traditional manufacturers would embrace as a side effect of growth.

Camplese was in the process of selling the special effects side of the business because it was becoming too costly to operate, and she did not want to have to outsource the business overseas.

And so she did.  She found the right company to acquire that side of the business, and then she focused on what she loved.

Camplese is enjoying focusing solely on the fang production of her business. “It’s completely changed the way we do business,” she said. “I’m learning how to do things on a smaller scale.” The Chicago-based company she sold the special effects operation to has kept its production stateside, which Camplese was happy about. She continues to have two full-time employees and about 10 seasonal workers. 2005 and 2006 revenues remained above $1 million.

A million bucks of fangs being made in the middle of vineyards and avocado orchards on the central coast of California.  By a company that prefers the beauty of staying small.  Who'd have thunk it?

Company Tales

A lot of companies are working on lean these days, and perhaps some of them are your competitors.  Each day Google is nice enough to send me a list of company lean stories which I usually end up filing.  But here are just a few quick summaries to kick off a new week.

Advanced Micro Devices is bucking the trend of going to larger and larger wafer sizes by focusing on shortening cycle times.  Large wafers are in effect a form of batch processing, creating additional quality risk, equipment monuments, and inventory cost.

Doug Grose, senior vice president in charge of manufacturing and supply chain at AMD, made brief reference to the development center, saying it was part of AMD’s emphasis on reduced cycle times, improved tool predictability and “mini batch tools.” “The blind focus on raw capacity” is butting up against the need to make a wide variety of products, with much faster cycle times, Grose said. “We need to reduce waste and reduce the cycle time, and to do that, the industry needs to discover the issues that factor into our cycle times.

TB Wood's in Pennsylvania is bucking the outsourcing and offshoring trend by focusing on the competitive advantage of speed.  The transmission equipment manufacturer just celebrated its 150th anniversary, and apparently intends to prosper for the next century.

"What we have the ability to do is make things fast and big, something that offshore production can't do," said Lew Crist, business unit manager, belted drives.  About two years ago, the company introduced "lean manufacturing" methods, designed to improve efficiency and reduce waste. "Lean system is the road map to where we need to go," Crist said.   "Something that used to take three to four days is now on a 35-minute cycle."

Gorbel Inc. near Rochester makes jib and workstation bridge cranes.  Their concern is scalability to accomodate growth, and they're using lean to help.

We're focusing on scalability through internal leadership training, lean manufacturing and lean office, and primarily working to create brilliant, world-class business processes that we can grow from. [Brian Reh, President]

At Lasco Bathware in Washington state, lean manufacturing methods are being used to help improve environmental impact.

Work on what was called a lean manufacturing and environment project began in 2006 and has resulted in a 29,000-pound annual decrease in the amount of excess fiber resin spray generated at the plant. By creating cleaner, more-organized work areas and eliminating production bottlenecks, the lean manufacturing team has cut annual labor costs by about $31,000 and redirected about 1,950 hours of labor to other, value-added activities.

Skier's Choice Inc., a manufacturer of ski boats in Tennessee, uses lean to respond to increased market demand without adding cost.

Skier’s Choice Inc., manufacturer of Supra and Moomba inboard towboats, increased production at its Maryville facility from 10 boats a day to 11 as a response to market demand.  [President Rick] Tinker attributed the increased production to Skier’s Choice employees and their efforts to implement improved quality and lean manufacturing practices. The lean manufacturing process has been a primary focus at Skier’s Choice for much of the past year with a strong emphasis on the application of important lean principles in manufacturing, source quality and material delivery.

How are your lean efforts going?

Harvard's Flying Pigs

Pigs may soon be flying.  We've thrashed the large b-schools quite a bit for ivory tower wisdom that usually promotes the glories of oursourcing, offshoring, and traditional accounting.  But recently we've had to give kudos to Wharton, Kellogg, and others for an occasional understanding of true lean.  We now add the Harvard Business School to that list after reading Julia Hanna's recent HBS article titled Bringing 'Lean' Principles to Service Industries.

Thanks to the pioneering success of Toyota, the concept of a "lean" operating system has been implemented in countless manufacturing companies and even adapted for industries as diverse as insurance and healthcare. With its focus on standardization, quality improvement, cost reduction, and efficiency, lean's influence continues to grow.

No meat, but good start.  Understanding some of lean's conundrums is often an indicator of whether the author really knows true lean.

Unfortunately, lean's prevalence has led to some misconceptions. "Some people think lean means 'not fat,' as in laying people off," [Professor David] Upton says, noting that in their paper they propose that the difference in a lean operating system comes from how it alters the way a company learns through changes in problem solving, coordination, and standardization.

The author goes on to describe Professor Upton's analysis of lean at Wipro Technologies.  Interestingly enough Wipro is an Indian outsource provider of software services... that is going lean.  A lesson to those in higher-cost countries that haven't yet embarked on lean, or are resting on their laurels after starting the never-ending lean journey.  Wipro has done well, but one of Upton's more interesting comments is,

"These companies are intellectual environments. People are very interested in taking conceptual ideas and figuring out how to put them into practice. There's not the same division between the 'real world' and university research that you often encounter in the United States."

Or vice versa.  I hope the academic world continues to learn about the 'real world' of lean manufacturing.

Ruger Drains the Swamp

Those of us that have gone through a lean transformation or two know that it is hard, very hard.  Probably the most difficult aspect is learning what you didn't know... those surprises that throw all the planning out the window.  The good news is that you're still on the right track, and poised for success if you can weather the intervening storm.

That storm can be pretty intense, especially in public companies that come under the scrutiny of lean-ignorant analysts.  Which is what gun-maker Ruger is experiencing today.  Last year they knew they had to make some changes to remain competitive.

The CEO said that Ruger in 2006 faced challenges in manufacturing, including excess inventory, congested factories and an annual order system that complicated production planning.

Sounds familiar, doesn't it?  Many companies would simply give up and outsource, but CEO Michael Fifer's team created a transformation plan based on Lean. 

Our transformation plan included eight major components. Altogether, they are intended to change our culture and the way we do business, and we refer to them internally as the Ruger Business System. The key elements are modernizing our manufacturing through adoption of all of the key principles employed by Toyota, creating a strong new product development process, and instilling urgency behind new product introductions. We expect this transformation to take at least three more years, and very likely as many as five years. And it will not always go smoothly or show constant improvement in our operating results.

They knew it would be hard, and they prepared their people... but not the Street analysts.  Their first step was to whack inventory, which they knew was hiding problems.

The first major step in transformation of our manufacturing was a deliberate, severe reduction in inventory and elimination of the practices that produced it. We reduced inventory by $28.3 million in the second half of 2006 and $26.6 million in the first half of 2007. Inventory masks problems in the production process. By reducing inventory, challenges from poor machinery and tool reliability, manufacturing issues, long machine changeover times, and vendor supply issues are all brought to the forefront. Because there is not spare inventory to draw upon, these challenges need to be addressed in real time, with a focus on permanent corrective actions that address the root cause problems. That is a very painful process in the short term, fraught with line stoppages and operating within a firefighting environment. It requires expanded engineering resources and training for front line supervisors and perseverance in the face of sometimes seemingly insurmountable obstacles.

I couldn't shorten that quote... Fifer said it perfectly.  He knew it would be a challenge, but he also outlined why that pain was necessary to create future improvement.  They are already working on the next steps.

The next major steps in the manufacturing transformation include setting up manufacturing cells, which convert materials into finished goods or key subassemblies in one area and which emphasize flow production rather than batch production, and implementing pull systems. Cell manufacturing and pull systems are a major departure from the old-style, batch process centers. Currently we have the initial cells in place for approximately one half of our manufacturing and assembly processes.

Exactly write, and there were similar programs to improve non-manufacturing areas.  But then Wall Street got a glimpse of what the intermediate steps of a lean transformation can do to traditional accounting metrics.

Ruger went way off target Thursday after swinging to a quarterly loss. The gun maker's shares closed down 38%.  Ruger, based in Southport, Conn., posted a loss of three cents a share for the third quarter, down from a two-cent profit a year ago.

The share price was also driven by a traditional analyst perspective of traditional accounting.

Jim Barrett is one of the few Wall Street analysts keeping Ruger in his sights. "The sharp reversal was caused by management too quickly moving to introduce lean manufacturing. Once the implementation was underway, management realized it had inadequate machinery, its machine changeover times were too long and it had vendor supply issues. As a result, production problems returned and Sturm Ruger once again faced difficulty getting product out the door," he wrote.

Of course he perceives that as a negative, but those of us in the lean world know it's a positive.  If you don't realize you have inadequate machinery, changeover times, and supply chain issues then how can you fix them?  Actually, maybe I should give Mr. Barrett more credit.

But as a believer in a "slow but steady improvement toward fixing its manufacturing operations," Barrett said Ruger's weak earnings "will clearly be painful for RGR shareholders in the near term, but we think it is very good news for prospective shareholders." Ruger doesn't get a lot of attention from the Street, so any bargain hunters should draw a bead on Fifer's turnaround plan letter and decide if it's on the mark.

Agreed, although I don't believe it is always necessary to go slow.  Ruger appears to be doing things right to focus on being competitive over the long term.  If they can weather the intermediate storm, they could become a great company... and investment.

Schwarzenegger Leadership

Two years ago we wrote a post contrasting the leadership, planning, and execution associated with 9/11 and Katrina.  On 9/11,

9/11 was an event unlike any experienced before in the United States.  However New York had a very detailed and well-rehearsed emergency action plan that was immediately put into place.  The mayor and his various commissioners immediately knew where to go and assembled a rapid-response "war room".  Communication issues were experienced, but they had been planned for and hence the impact was minimized.  Giuliani took immediate charge, and very visibly commanded and coordinated his team.  He also visibly reassured his city and the nation.

And then there was Katrina,

Katrina, by contrast, was known to be an event waiting to happen.  Unlike 9/11, a specific plan was created for this type of event, one part of which called for an immediate and mandatory evacuation when a category 3 hurricane was poised to hit the city.  The plan called for using city and school buses to evacuate those without transportation, but this plan was never executed... leaving tens of thousands stranded and hundreds of buses submerged only blocks from the Superdome.  The governor had the authority to call out the National Guard immediately, but waited, and almost 1,000 of the New Orleans police deserted immediately.

Now we have a third example, the recent wild fires in California.  As a resident, I'm used to the possibility of fire... and earthquakes, and mudslides, and paparazzi chasing Paris Hilton and Lindsay Lohan.  I'm not sure which is worse.  The largest earthquake in recent years was only about 15 miles from me, but there was minimal damage and injury.  The fires created a lot of damage but surprisingly few fatalities, and we'll see what the rainy season mudslides bring.  Paris and Lindsay are simply pains in the rear quarter.

Only in California could a movie star become governor... twice.  Schwarzenegger has many critics but also a very high approval rating, and how he handled the fire shows why.

It's hard not to conclude, at this point, that Somebody Up There is a Schwarzenegger fan. How else does a muscle-bound guy with a heavy accent become a major movie star and then governor of Cauleeforneeah?  The California Governor is drawing praise from across the political spectrum for his leadership as the fire emergency forced the largest evacuation in the state's history.

"Across the political spectrum" is a bit of an understatement.  When a Republican can get Diane Feinstein and even Barbara Boxer to sing his praises, it's a rather extraordinary day.

Did Arnold complain like the mayor of New Orleans and governor of Louisiana?  No.  He knew that the federal government is not supposed to be a first responder.  But he was also lucky enough to be leading a state that had detailed plans for just this type of emergency, and unlike New Orleans and Louisiana, he actually executed them.   

But if it's true that the Governor was lucky, it's also true that luck favors the well-prepared. Schwarzenegger was able to move those National Guard troops quickly because he had a plan in place to redeploy them in an emergency. The obvious competence of the emergency response — in stark contrast to the debacle of Hurricane Katrina — was the product of years of training, planning and drills.

Planning and execution is one part of leadership, but another that we know well in the lean manufacturing world is going to the gemba.  The place where it is happening.  And that's what the Governator did within hours.

He had planned to be with his wife, Maria Shriver, at a major conference on women's issues sponsored by his office, but when the emergency escalated, he rushed to the front lines. With squinting eyes and frowny mouth, he greeted firefighters and surveyed the ruins of incinerated homes. "The most important thing is you jump into action as quickly as possible," he said. 

Which brings me to another facet of effective leadership: connecting with your team, your customers, and your suppliers on a personal level.

The public needs to see "that you are a hands-on Governor," [Schwarzenegger said] that you "take care of the firefighters" and feel the pain of people who have lost their homes.   Martin Kaplan, a former Democratic strategist and speechwriter who now directs the Norman Lear Center at the University of Southern California, says Schwarzenegger has been on local television almost constantly, projecting calm and reassurance.  "I'm also struck by his focus on the human dimensions of the disaster," Kaplan said. "He steers clear of the bureaucracy and lasers in on the personal."

Create a plan, train on the plan, execute the plan, go to the gemba, connect with people.  It seems so easy.  To bad so few do a good job at it.

Schwarzenegger's crisis appears to be ending the way many of his movies wrapped up: with a lot of smoke and wreckage, but with the hero stronger than ever. This is one time, however, that Arnold would prefer not to star in a sequel.

AME Conference Next Week

The annual conference of the Association for Manufacturing Excellence is in Chicago next week.  This is the largest lean conference in the world, and once again it has sold out.  Next week's conference looks like a winner, with many great tours, pre- and post-conference workshops, and a very large number of presentations and workshops during the week.  Continuing AME's emphasis on being "by practitioners for practitioners" most of the presentations are by people at companies that have actually done lean.

As an AME management team slave, I'll be the room host for a couple of the presentations on Thursday: Leveraging the Strengths of Suppliers at 9:20am and Supply Management Value Stream at 10:50am.  If you're at the conference, stop by and say hi.

I hope to see you there.  And if you can't make it, registrations are already coming in for the 2008 conference in Toronto. 

Fun With Statistics, Elderly Edition

In this edition of Fun With Statistics we take a look at the effect of a point of reference on data.  How old are you?  Do you feel old?  How is that related to that all-important point of data: your age.  From Tyler Cowen at Marginal Revolution comes a study by John Shoven:

The current practice of measuring age as years-since-birth, both in common practice and in the law, rather than alternative measures reflecting a person's stage in the lifecycle distorts important behavior such as retirement, saving, and the discussion of dependency ratios.  Two alternative measures of age are explored: mortality risk and remaining life expectancy.  With these alternative measures, the huge wave of elderly forecast for the first half of this century doesn't look like a huge wave at all.  By conventional 65+ standards, the fraction of the population that is elderly will grow by about 66 percent.  However, the fraction of the population that is above a mortality rate that corresponds to 65+ today will grow by only 20 percent.  Needless to say, the aging of the society is a lot less dramatic with the alternative mortality-based age measures.  In a separate application of age measurement...GDP would be between seven and ten percent higher by 2050 if retirement lengths stabilize.

Perhaps this is analogous to push vs pull statistics?  Tyler comments,

Note that the entire increase of life expectancy of the twentieth century has been taken in the form of retirement, rather than extra work.  Of course our social security and Medicare policies have encouraged early retirement, and we have not adjusted age eligibilities for longer life spans and better health.  For fiscal reasons, we will likely have to increase eligibility ages; not only will we spend less money but it will encourage more work.  If you have been thinking that a demographically-based American economic collapse is virtually inevitable, this paper gives some grounds for hope.

Let's forget the sociopolitical implications and move on, briefly as I presume we're all fairly brain dead by this point, to an application to business data.

Should sales, margin, return-on-whatever, first pass yield, on-time delivery, and inventory be measured from zero?  Or relative to the starting point of certain levels.  Achieving $100,000 in sales is a completely different effort and activity than achieving $1,000,000 or $1,000,000,000.  Moving from $1,000,000,000 to $1,000,100,000 is a considerably different than moving from $0 to $100,000 (I know that, painfully, from experience creating my own startup after having worked in a Fortune-25).  The incremental, or even logarithmic incremental, has a lot of meaning.  The delta from zero not so much.  Similarly the effort required to get down to 5 inventory turns, then 10, then 20, then 50.  It's a completely different organizational, leadership, planning, and execution dynamic to achieve each of those intervals.

Does your data really reflect the underlying activity?

Mish Mash of This 'n That

The Wall Street Journal often has some thought-provoking articles.  Occasionally some are truly lean-oriented, but most of the time they may slightly touch a lean concept.  Monday's Journal had several such articles, none of which warranted a full post commentary, so the following is a bit of a mish-mash all at once.

First off, on the front page is an article titled Ship Shortage Pushes Up Prices of Raw Materials.  How long have we been preaching about understanding the total cost of offshoring and outsourcing?  Labor savings, which are questionable to begin with, can only go so far. 

The average price of renting a ship to carry raw materials from Brazil to China has nearly tripled to $180,000 a day from $65,000 a year ago. In some cases, ocean shipping can be more expensive than the cargo itself. Iron ore, for example, costs about $60 a ton, but ship owners typically are charging about $88 a ton to transport it from Brazil to Asia.

And as the article goes on to point out, the shortage of ships is pushing up prices across the board... including the delivery of finished product.  I won't go into the potential quality, cash tied up in WIP, and other costs associated with having loads of product floating on the high seas.  What was your total landed cost... and potential liability... again?

It's amazing how markets can trump regulations any day.  With gas prices shooting skyward, SUV's are suddenly out of favor and automakers are focusing on smaller cars.  Companies with efficient and nimble design programs are moving quickly, and those that continue to be focused on the glories of trucks might be in trouble.  Although small vehicles as a whole pose a challenge.

The industry's shift poses a challenge that no car maker has managed yet to meet: how to make decent profits. Trucks and SUVs earn 10% to 20% margins, which for many popular models can mean $2,500 to $5,000 profit per vehicle. Even the best-selling small cars like Honda Motor Co.'s Fit and Toyota's Yaris subcompact earn margins for manufacturers of just 2% to 3% -- about $300 per car. In emerging markets, the cars are sold with fewer profit-boosting features, so car makers earn even less.

But a 20% margin on a vehicle that doesn't sell creates... hmmm... not much cash.  Amazing how accounting works.

It's always a good idea to have a good understanding of what your organization is good at.  Occasionally we try to branch out a bit to hit a broader market or new opportunity, but most of us try to move slowly and deliberately.  And those that take wild swings... well, occasionally they hit an opportunistic home run, but often than not they wake up wondering what the heck they were thinking.

Aluminum giant Alcoa is getting out of the plastic-wrap and some automotive businesses. Newmont Mining, the world's second-largest gold producer by output, plans to jettison its merchant-banking unit. And Anglo American, the No. 2 mining company by output, has put its Tarmac road-surfacing unit on the block.  Economists call it respecialization. Companies call it focusing on core assets, and it comes and goes in cycles.

But tell that to Japanese brewers like Kirin, who are thinking about brancing out into pharmaceuticals.  There's an interesting side point to this phenomena however:

Kirin's latest move underscores a fundamental difference in the way Japanese brewers are approaching their future compared with their Western counterparts. Because buying a company within the same industry often requires layoffs and closures, Japanese companies tend to avoid mergers. That has enticed Japan's four big beer makers to seek ways to diversify into far-flung areas, from baby food to flowers.

I like that thought process.  Or perhaps it's the thought of beer-flavored cold medicine.

And finally, albeit not from the Wall Street Journal, is a lesson on branding.  If you had a global brand  recognized for excellence, power, and beauty, what other product would you partner with to promote the brand?  Presumably something known for excellence, power, and beauty?  Tell that to Ferrari, who has partnered with Segway to co-brand one of their two-wheeled contraptions.  Granted, it's a cool machine, but one that hasn't come close to living up to expectations.  Does the Ferrari Segway go faster?  Nope.  The only change is that it's red with a Ferrari coat of arms.

Vroom!  Sometimes you just have to wonder. 

County Envy

Many companies use "sales per employee" or "customers per employee" as measures of productivity and efficiency.  I've often wondered, and occasionally outright disputed, the wisdom of such metrics as the real bottom line is growth and cash.  But while pondering such incongruities, I also wonder if administrative activities sometimes expand without regard for need or comparative analysis.

What the heck am I getting at?  Well one example that I've always been curious about, especially after moving west a couple decades ago, is the structure of government.  How much governance and oversight is really necessary to deliver a set amount of services?  I'm talking more about structure and layers than outright employees, although the number of employees is often driven by structure... which I guess in a roundabout way is also pertinent to my point.  Whatever that is.

So let's take a look at something that's admittedly on the extreme to illustrate that point.

In California, like most states, we have numerous counties.  Those entities provide law enforcement to non-incorporated areas, as well as often basic public utilities and services.  One of the counties in California is San Bernardino, which is west of Los Angeles.  Here are some quick stats:

• Area: 20,105 square miles, roughly 215 miles by 150 miles
• Population: 2,028,013 in 2006

Now let's take a look at some other geopolitical entities in the U.S.:

• Rhode Island area: 1,214 sq miles, population: 1,0617,000
• Delaware area: 2,044 sq miles, population: 853,000
• Hawaii area: 6,470 sq miles, population: 1,285,000

But here's the kicker: there are 5 counties in Rhode Island, 3 in Delaware, and effectively 8 in Hawaii.  When you can fit two Rhode Islands, three Delawares, Connecticut and Hawaii within the San Bernardino County area and still have a little open space left over, what the heck are those states doing with counties? 

Is it simply a case of "county envy"?  Since the larger states have counties, do they feel they must?  Do they have a legacy sheriff school that must send it's newly-minted sheriffs somewhere?  It's obviously not related to population either, as San Bernardino has almost twice the population of any of those states.  I'd suggest following the lead of larger states, especially states like ours full of nuts and flakes, is not always a good idea. 

Yes, states provide a different type of governance than counties.  They represent the people at a federal level, they craft regulation after regulation and then go into battle with other states and the feds when those regulations create interstate conflict.  State politicos also handle major projects like figuring out what design should be on a coin.

But in delivering real services, is there really a need for additional management and oversight layers to create counties, regardless of the population being served?  Why wouldn't some innovative politician in Delaware look outside of her state boundaries, see that county on the west coast called San Bernardino, and say "hey, if they can provide services for over two million souls, why do I need three counties?"  Or to go even further, "perhaps we should merge with Connecticut or Massachusetts."

How many pencil-pushers, overseers, and policy-creators are needed to deliver a set amount of services... value... to a set number of people... customers?  That's a question not only for government, but for business and pretty much any organization.  Do you need a monstrous office building in Detroit to hold all the overseers, or do you need a small non-descript office building in Washington DC like Danaher has?

Flatten your organization, eliminate what doesn't need to be managed, train and give more authority to the folks that do the real work... who will be more efficient if they don't have to ask and sell ever decision.       

Manufacturing News, Fair & Balanced?

The latest issue of Manufacturing News is filled with the usual supposed doom and gloom of U.S.-based manufacturing, with one notable exception.  We've complained publicly and privately about the balance, and it looks like editor Richard McCormick has listened... at least a bit.  Even with that problem it is still a great newsletter and I'd recommend subscribing.

Daniel Luria, Research Director at the Michigan Manufacturing Technology Center, has an article titled Is Manufacturing Toast?   Lucky for you non-subscribers it is one of the two free articles on the website.  Mr. Luria goes through all the usual horrors of trying to compete with offshore low-cost labor countries, but then he really hits the nail on the head.  He describes the hidden costs of outsourcing including long supply chains, in-transit inventories, and the like.  Then he sums it up with some encouraging data:

At MMTC, we have concluded that the true landed cost advantage of a typical low-wage offshore producer is really more like 17 percent. But those are just averages. The lowwage country landed cost advantage could be 17 percent, but it can also be 7 percent, 27 percent or 37 percent depending on the type of business.

Just as important: How much of the cost gap could be eliminated by increasing productivity? By reducing inventory? By redesigning products? By a further drop in the value of the U.S. dollar? 

Even though the average U.S. manufacturer’s costs are about 17 percent higher than the average low-wagecountry manufacturer’s landed cost, 20 percent of U.S.- based manufacturers already have lower costs than their low-wage-country competitors. In some industries, 35 percent of U.S. plants are lower-cost. Just as important, another 30 percent of U.S. manufacturers are within striking distance of LWC producers’ average landed cost.

That bears repeating:

20 percent of U.S.- based manufacturers already have lower costs than their low-wage-country competitors. Just as important, another 30 percent of U.S. manufacturers are within striking distance of LWC producers’ average landed cost.

So what the protectionist crowd is really saying is "let's bail out the 50 percent that doesn't get it."  Or at least create a tariff smokescreen behind which they can continue to whine and complain... while the other 50 percent is busy competing.

As Pogo would say, "we have met the enemy and he is us."  Not only are many companies crying for protection instead of working to improve their operations, but several U.S. multinationals are outright encouraging it.  As Mr. Luria put it,

As we will see, only half the problem is that other nation’s manufacturers are “beating” ours; the other half is that, in industry after industry, U.S.-based large-firm customers — think GM, GE, Wal-Mart — are telling their American suppliers to increase their “offshore footprint.” Reluctantly or not, many suppliers are listening and sourcing more work offshore.

Sad, especially when truly innovative company after company has shown that they can compete globally from U.S.-based factories.  And as Mr. Luria and the MMTC notes, 20 percent of U.S. manufacturers are and 30 percent are within striking distance. 

I hope you're working to become part of that crowd, and not part of the group that sits around complaining.