By Richard Neal, Executive Director, Integrated Manufacturing Technology Initiative
November 30, 2000
Three people were at work on a construction site. All were doing the same job, but when each was asked what the job was, the answers varied. "Breaking rocks," the first replied. "Earning my living," the second said. "Helping to build a cathedral," said the third. -- Peter Schultz. The Super model Project is a story about people who understand building a cathedral.
I'd like to share a parable with you. There was a great people who made things. They were rich in wisdom, and technology and connectedness was a way of life to them. From these people sprang up many great tools, and the tools made making things much easier. However, because of the profit to be made by building different tools, there emerged a proliferation of tools that could not communicate with each other. Competition, not cooperation was the environment of making things, and the lack of integration cost the people billions of dollars. In the land of the computer wizards, men and women rose up and built great companies that provided interoperable systems for the computers and networks over which they connect. Alas, no such unity arose in the land of making things. One might say, similar to a story from long ago, that the languages were scrambled to prevent their achieving the goals for which they strove. As time passed, STEPs were taken to create, not a common language, but translators that would allow the various makers of things to use different tools but still communicate and cooperate with others. While this was a STEP in the right direction, progress was slow because the challenge was great.
Even with these concerns, things were good in the land of making things. Many people became wealthy exchanging paper, and many forgot about the importance of making things. However, some remembered the innovative, product driven environment that had made the land great, and there were those who dared to question the status quo. They asked, Have we forgotten that wealth creation is based on tangible value and product? Can we not capture a larger share of the market if we make things better? Why is it necessary to create multiple models of the things we make? Why do we need so many STEPs along the way? Why can't we create and exchange product models in the language of the translators instead of the design systems and make those models rich enough that they can cause the machines that make things to operate properly? Why can't we capture the knowledge of those who know how to make things and include that knowledge in making things better? Why must we have buildings with many people calculating and transferring files? Can we not send this information directly to the machines that make things? Finally, these wise people thought of the most important opportunity of all why can't we get the government to give us some money to make our vision come true?
The demonstration that we are a part of today is a celebration of the vision of the wise people who dared to ask these questions a good group who have several things in common. First, they understand that manufacturing matters to the nation. Second, they understand that interoperability is a must for global competitiveness. Finally, they understand that cooperation is a great strategy for success.
Manufacturing does matter. Manufacturing contributes 17 percent to the gross domestic product. 45% of our nation's economy is tied, directly or indirectly, to manufacturing, as is 41 percent of our employment. 1 80 percent of our exports are manufactured goods, and 75 percent of the total R&D investment is from the manufacturing sector. Manufacturing creates wealth and fuels our nation's economy. As Alan Greenspan repeatedly reminds us, productivity is the engine that fuels our economic growth. We are reaping the benefit of past technology investment in a strong economy. We place a lot of emphasis on inflation, which is very important since flat durable-goods prices between 1996 and 1999 have saved consumers over $101 billion. However, we should not miss the fact that increased productivity in durable-goods manufacturing has added $618 billion to GDP between 1992 and 1998. 2
Unfortunately, the trend in the U.S. government for the last few years has been toward a hands off industrial policy. This policy must be modified and industrial competitiveness must be given priority and support. According to the NSF, there has been a 26% decline in our applied R%D investment since 1993 (based on % of the national budget and adjusted for inflation). While it is tempting to curse the darkness, there are encouraging signs. It must be acknowledged that after several years of decline, this year's budget shows a dramatic increase in R&D funding. On the other side of the ledger, it is somewhat difficult to find manufacturing R&D in that budget increase. It remains to be seen whether the funding increase will be channeled in a productive direction. Manufacturing matters!
The second thing that these wise people understood is that interoperability is not an optional capability or a long-term desire, but a necessity. Even as long ago as 1996, manufacturing companies invested an estimated $46 billion in information technology products. Studies have shown that for every dollar spent on IT products, integration costs are 1 to 5 times as much as the original purchase. A very conservative estimate is that the lack of interoperability is costing manufacturing companies over $100 billion a year. A recent study, commissioned by the National Institute of Standards and Technologies established that the automotive industry in the U.S. loses over $1 billion a year in the recreation of models and through lack of a common design language. Automotive companies are dedicated to pushing their time-to-market from 30 months to 12 months, and are finding that a major barrier is the lack of interoperability — which costs them $200 to $400 million for every new vehicle design.
The wise people of the Supermodel program understand that we must solve the interoperability problem. STEP is a great foundation. It's been a long time coming, but it is well done, and it is mature enough today that companies like Boeing, Lockheed Martin, General Electric, and a long list of others have stated, this is the way we do business.
With that foundation, and participation in national programs, the wise people saw an opportunity to take a next and larger STEP that of direct NC. That's a breakthrough strategy. Interoperability matters.
The final point is that not invented here has to be replaced with a mindset of working the puzzle together. It is particularly pleasing to me to know that the Technologies Enabling Agile Manufacturing (TEAM) program and the Integrated Manufacturing Technology Initiative (IMTI) helped plant the vision that led to the program called the Super Model. Indeed, this project is one of the first of what we hope will be many successes that trace its roots to a consensus national manufacturing roadmap, developed by industry with the support of multiple government agencies working together for the common good. The Super model project helps harvest our past investment.
The leaders of the Super model project created an environment for cooperation. They created an Industrial Review Board and developed a team of workers, not meeting attendees. Through cooperation with the U.S. Army's TIME program, the Super Model project coupled its efforts with the efforts of Open Modular Architecture Controller (OMAC) consortium, which is dedicated to a controller that can support the new mindset of direct numerical control. Companies who receive no funding for their efforts stepped up to the plate because they saw the value of the effort, and they saw the value to their companies of making a contribution. Cooperation is the only win strategy.
Tonight, we applaud what has been done. We applaud the way that it has been done, and, more importantly, we applaud the direction that it takes us. We celebrate the people of vision and their successes. We celebrate their attitude of cooperation.
We can and must develop breakthrough technologies that have a positive disruptive impact in the marketplace. Continuous improvement is not enough to deliver the great leaps that we all demand. We must keep our vision beyond the horizon and seek breakthrough successes.
When we look today at the health of the electronics industry which, like the Phoenix, has risen from the ashes of despair of a decade ago to a position of world dominance, we learn an important lesson about what can be done through cooperation. The lifecycle of manufacturing equipment and processes, in many cases today is 40 to 50 years. In many operations, we make product the way we made it to win World War I and II. The cycle must be reversed. We must increase our investment in, not just science and technology, but applied R&D in support of the nation's manufacturing technology base. Government and industry must cooperate, in efforts like this one, to raise the bar for manufacturing excellence. We must take bold STEPS, always remembering that:
It is better to fail at something that will ultimately succeed, than to succeed at something that will ultimately fail. Source Unknown
Thanks to Martin Hardwick for the invitation to participate in this important event, and my congratulations to the team that has reached this milestone. Let us not forget the great thing in the world is not so much where we stand, as in what direction we are moving. -- Oliver Wendell Holmes. We're moving in the right direction.
1. All from Manufacturing Sector Linkages with Non-Manufacturing Industries, Ron Cooper
2. Popkin study quoted in the Wall Street Journal, Sept. 28, 2000