"Manufacturers need the mindset of an Internet company"

Marlin Steel President Drew Greenblatt kicked off the weekly online speakers series for the "Reinvesting in American Manufacturing" group on LinkedIn today.

As the "Reinvesting" group states, "For decades, manufacturers have been growing their capital investments outside the U.S.. Now, a confluence of macro factors is causing many firms to invest in the U.S. once again. Rising labor costs in Asia, threats to the security of intellectual property, abundant U.S. shale oil and gas, and optimistic forecasts for U.S. GDP growth are compelling manufacturers all over the world to rebalance their production portfolios and increase capital investment in North America."

Here's the Q&A with the president of Marlin Steel:

1. What is one commonly held misperception about manufacturing in the U.S.?

Two major ones come to mind. The first misperception is that the U.S. was formerly a manufacturing powerhouse. The United States still produces the most goods and services as measured by gross domestic product (GDP), far ahead of second-place China. In fact, the U.S. will produce about one-fifth of the world's manufactured products this year, just as it has for the past 40 years, as technology has propelled enormous efficiencies on the assembly line. It’s been hard to celebrate massive gains in productivity because of the turbulence for communities that relied on large factories, but no one should conclude that we have lost our skill as a manufacturer for the world.

The second misperception is that manufacturing is dirty, dangerous, bleak work. In fact, factories are cleaner, greener and safer workplaces than ever. They are also hubs for great technological innovation, generating two-thirds of the private-sector R&D in the country. The average manufacturing employee makes $77,000 a year -- 28 percent higher than the pay for the average worker in all industries. Also, about 95 percent of manufacturers offer health insurance to their employees.
2. What is the most undervalued, strategic opportunity for manufacturers currently in the U.S. or for those looking to locate in the U.S.?

The recent domestic natural gas discovery that potentially makes the U.S. so much less reliant on foreign oil offers huge strategic opportunity, but a different kind of energy -– creative energy – remains at the heart of America’s continuing global advantage, I believe. This is a nation imbued with a can-do, figure-it-out, push-forward mindset. We are a land of enterprising, creative people. American manufacturing has long been the beneficiary of that characteristic. That trait will become even more important as technological advances such as 3D printing reshape the manufacturing landscape.

3. In ten years, what will be the most valuable component for a successful manufacturer?

People were, are and always will be the most valuable component. Among the best pieces of advice I ever received was to invest 5 percent of our annual payroll in training. When a prospective client calls, I want our teams to know the best way to exploit our robots and software to differentiate ourselves from the competition. If we can come up with a design for an industrial material handling basket that can accommodate, say, four times as many valves as a competitor’s solution, the client is going to be able to push more valves out of its factory and our approach is going to be more valuable to them. Such innovation is stoked by an emphasis on training and internal dialogue between engineers and machinists – the kind of conversations you might imagine taking place at a Google or an Apple, not at a Marlin Steel. We need that approach just as much. We must be an idea lab. If we simply build an industrial basket just as good as everyone else’s, we will get left in the dust. Manufacturers need the mindset of an Internet company.