Tag: global

John Stroup, President & CEO of Belden Inc., explains the major global trends driving investment in automation for manufacturing. Some factors contributing to automation’s increased adoption are rising labor costs, the need for increased productivity, and changing consumer behaviors.

Automation enables manufacturers to become better at producing to meet consumer demand because it significantly shortens changeover, resulting in greater flexibility. Stroup goes on to explain that, due to rising labor costs in Asia, many manufacturers are moving production to the United States and using automation to replace human labor. Productivity is more elusive than ever in the current post-recession landscape, which increases the need to focus on maximizing productivity and ROI.

All of these factors are generating a great deal of interest in the adoption of automation in manufacturing—a process Stroup says will be “evolutionary, not revolutionary.” Stroup estimates automation adoption will reach 74% in 6-10 years. The automotive industry is already at that mark.

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A Boeing Center digital production

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Automation, or the use of robots and other artificial intelligence to perform tasks, has increased dramatically over the past couple decades. And while a Skynet scenario in the near future is unlikely, we are undoubtedly on the brink of an automation revolution.

John Stroup, President & CEO of Belden Inc., recently paid a visit to The Boeing Center to discuss some of the economic drivers for a revolution in automation. He believes that the United States is well-positioned for increased automation in manufacturing due to recent technological advances. In fact, the majority of manufacturing jobs lost in the last 10-15 years are a result of increased automation, not offshoring (as is commonly thought).

One of the economic factors Stroup credits for the automation revolution is the rise in minimum wages. As labor costs increase, companies look for ways to decrease spending, often turning to machines to replace their human counterparts. But despite the downward trend in manufacturing jobs, there has been a massive uptick in productivity due to robotics and other technology. He predicts that by 2025, the global average of tasks performed by robots will be around 25%, more than double what it is today. Stroup then went on to describe his experience at a “lights-out factory,” or a factory that doesn’t turn on the lights because it utilizes only robots and artificial intelligence.

Stroup went on to mention that Europe is often ahead of the curve in terms of automation due to relatively expensive labor. Regardless of one’s opinions about automation, we are likely to see its increased adoption as global labor costs rise and the cost of implementing AI falls.

For more supply chain digital content and cutting-edge research, check us out on the socials [@theboeingcenter] and our website [olin.wustl.edu/bcsci]

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A Boeing Center digital production

Supply Chain  //  Operational Excellence  //  Risk Management

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Photo, above: Tom and Catherine Holland and their children.

Tom Holland, EMBA ’12, has always been drawn to a life of adventure. As a young man from central Illinois, he participated in Wilderness Adventures, an adventure travel camp headquartered in Jackson Hole, Wyoming, with program offerings all over the world. Founded in 1973, Wilderness Adventures is for students ages 11-20 and seeks to inspire their leadership capabilities while adventuring through the most pristine natural spaces on the planet.

“That month-long summer experience opened my eyes to the person I could be. I was also exposed to the thrill of outdoor adventure,” Tom says. “I found that the experience was a unique way to educate the minds of young adults. I didn’t know it was possible to receive leadership education in wilderness areas.”

Tom’s experience led to him pursue a degree in secondary education from WashU (LA’02), and after graduating, he became a high school teacher. While teaching high school social studies, he continued to spend his summers leading backpacking adventures for kids in Wyoming.

“The mountains became an extension of my classroom—one where I could grow young adults into the best version of themselves. Using the metaphor of wilderness challenge, we deepened our understanding of ourselves,” he says.

Eventually, Tom went on to become the Executive Director of a residential summer camp program in Wyoming. In his new role, Tom decided to return to Washington University, but this time as a member of Olin’s Executive MBA Class 38.

“The EMBA program, much like that summer adventure so many years ago, challenged me in new ways. I found myself learning from both my professors and my peers. Further, they challenged me to dream big when it came to my professional life in the camp and adventure travel business.”

Following his EMBA experience, Tom took on a new job as CEO of the American Camp Association. There, he served as an industry spokesperson and worked with thousands of summer camp programs in the United States to improve the quality and availability of programs to children.

It was during his tenure at the American Camp Association that he was contacted by the owners of Wilderness Adventures, the program he attended as a teenager. They expressed their desire to pass the torch of leadership after 43 years, and wondered if Tom and his wife, Catherine, would be interested in taking the step into business ownership.

“We were thrilled to be approached with this opportunity and to direct such a fantastic company. With over 25,000 alumni, Wilderness Adventures has been a leader in the camp and student adventure travel industry since 1973, and we look forward to continuing that legacy.”

With hundreds of students coming from all over the United States and many international countries too, the program has global reach. And after just over a year at the helm, it is easy to see that Tom is putting to use the skills he acquired at Olin. While remaining true to the core programming of electronics-free youth adventure travel expeditions in national parks and wild areas around the globe, Wilderness Adventures is launching a day camp program for a younger audience in Jackson Hole.

A surfing excursion with Wilderness Adventures

“It is our goal to inspire the next generation to dream big. I was issued that challenge through my experience with Wilderness Adventures all those years ago, and Catherine and I look forward to being stewards of that mission for years to come.”

During the month of March, Wilderness Adventures is offering a $200 program coupon for the children of Olin alumni who wish to enroll in the summer of 2017.  To claim your coupon, email info@wildernessadventures.com, with the subject line: OLIN20.

Written by guest blogger KC Friedrich, Senior Associate Director of Development, Olin Business School

The Boeing Center for Supply Chain Innovation presents…an interview with Professor Panos Kouvelis, Emerson Distinguished Professor of Operations and Manufacturing Management and Director of The Boeing Center for Supply Chain Innovation at Washington University in St. Louis, about the Global Supply Chain Benchmark Study, a collaborative research initiative of faculty at leading business schools including Olin. Below is an excerpt of the report; for the complete report, go here → http://bit.ly/GSCBS2016

BACKGROUND

“For the past 25 years manufacturing offshoring to low-cost locations like China has been the dominant strategy for many western manufacturing companies. This has led to a significant reduction of manufacturing jobs in developed economies. Recently, many manufacturers have reported they plan to bring back at least a part of their global production volume to developed countries. General Electric, for example, announced in 2012 they would relocate manufacturing and R&D of their household appliances business, which had previously been offshored to China and Mexico, to Louisville, KY in the USA.1 Similarly, Plantronics, a U.S. based manufacturer of headphones, shifted production volume back from China to Mexico.2 At the same time companies from perceived low-cost countries have reported investments in manufacturing capacity in developed economies. For instance, the Chinese company Lenovo recently brought back the production of personal computers to North America.

While there seems to be an emerging trend to reshore production, traditional offshoring to developing economies continues to be a viable phenomenon. For example, General Motors recently announced a USD 12bn investment in new plants in China.4 These examples offer just a glimpse of the magnitude of manufacturing location decisions companies are currently making in a wave of restructuring of their global supply chains.”

EXECUTIVE SUMMARY

“Despite the growing attention in the business press to reports of companies relocating manufacturing to western countries, there is very little empirical research on the scale of such decisions, their drivers and their impact. Hence, in this study we investigate current trends in production sourcing. Based on a survey of 74 leading manufacturing companies predominantly from North America, Europe and Japan we shed some light on (1) what production sourcing decisions are currently being made, (2) what drives these decisions and (3) what results do they lead to.

Our research suggests that there is a significant wave of restructuring of global supply chains in progress. Companies de- and increase production volume all over the globe as shown in the overview presented in Exhibit 1. However, we did not observe a dominant strategy for sourcing production volume. Companies make different decisions for a variety of reasons. While China continues to be the most attractive country for manufacturing, many companies reported following (also) other strategies. Moreover, we see that decision making has evolved from simple cost comparisons to more complex trade-offs between a magnitude of factors that are deemed important, i.e., across quality, market access and risk. Based on these and other reported drivers we see a shift of production not only to China but also to Eastern Europe and the ASEAN countries which are being used as nearshore sources of production for Western European and Chinese markets respectively.

For North America we see evidence for a return of manufacturing. It is not a strong trend but in our sample more companies report shifting production volume to North America rather than offshoring to other countries. This pattern is not consistent with the much cited reshoring trend predicted by many business and political commentators. The movement we observed is not driven by the reshoring of American firms but rather by European and Asian firms offshoring who account for 60% of the production volume increase in North America. While this is good news for manufacturing in North America, the indicators for the future of manufacturing in Western Europe appear to be less bright. Indeed, Western Europe is one of only two regions for which our sample reports a net decrease of production volume. Companies reported offshoring for a variety of reasons including shifting to either less costly locations or to places closer to market demand.

Despite the decline in production volume in certain regions, there is no evidence for a further decline in manufacturing jobs. In fact our sample reports that for China, Western and Eastern Europe their sourcing decisions hardly impacted employment. Moreover, it was only for North America and Japan that growth of manufacturing employment is observed.

We believe the analyses and insights presented in this research not only inform but also call for action. Executives should look at their supply chains critically by challenging their current footprint and production sourcing choices. We explicitly encourage benchmarking against the companies in our sample within their industry and across industries. Insights into market expectations and the forces driving the reported production sourcing and technology decisions should stimulate a discussion about future strategic actions.

For policy makers – especially in Western (European) countries – this research provides information concerning the perceived attractiveness of regions worldwide. Reading the report will provide policy makers with data about the trends in industry and the factors that have led companies to shift production into or away from particular regions and can thus inform the debate on how manufacturing policy can boost competitiveness, attract and retain manufacturing jobs.”

For the complete report, go here → http://bit.ly/GSCBS2016

Getting to Tel Aviv and Israel for the first time is a culture shock. You step off the plane and, instantly, you’re placed into an environment that is entirely foreign to almost everyone outside of Israel. This is the only country with Hebrew as the national language and Judaism as the national religion.

Guest blogger: Leah, a BSBA sophomore at Washington University in St. Louis

So, lets begin with the new language. Not only a new language that you very well might not understand, but also a new alphabet, which creates entirely new obstacles. We may not think too much about it, but the alphabet is very, very important. When in France, or Spain, or other European countries, there are plenty of cognates so that we can somewhat comprehend the signs we see on the streets or a menu of some sorts. Here that all changes.

Being Christian in a Jewish state isn’t so much of an obstacle here, but a reality check. Back in the States, we are surrounded by a Christian society that hangs lights during the Christmas months, some shops close down on Sundays for religious reasons, and many other nuances that seem to be just a part of life for us. But in Tel Aviv, there is a stark difference in the way that things are done. For religious reasons, there is no working allowed on Friday from sundown to Saturday around the same time.

From seeing all of these differences in societal occurrences, I’ve come to ask questions to further understand why some things are done the way they are here, and I’ve found myself becoming more curious about other ways of life than my own. This program isn’t only helping us learn about business in Israel, but also to learn about the culture and to appreciate it.

Bryan, Jared, Leah, Adam, and Marni at a start-up in Tel Aviv.

While there are so many cultural differences here, there are ways to adapt and adjust. For the most part, you can always find someone in the vicinity who speaks at least a little bit of English to help you out, and they are more than happy to do so. Israelis want everyone to understand their culture too, so there are never judgments passed. One specific asset that we have in this program is a peer mentor from the IDC campus. Having a personal connection with someone close to our age who can help us get around and see Tel Aviv the way that they see it as a local is an amazing experience that not many visitors enjoy.

The 2015 Israel Summer Business Academy begins June 4! In Tel Aviv, Israel, 35 undergraduate students are are coming together from six universities around the world for the next six weeks.

They’ll be studying venture creation, business, innovation, and entrepreneurship at IDC in Herzliya. In addition to time in the classroom, they’ll also embark on cultural and academic excursions to visit Jerusalem, Negev Desert, Golan Heights, and the Sea of Galilee.

For more information on ISBA and what to look forward to from this summer’s academy, visit the website and read last year’s blogs here. And be sure to follow the blog for updates on their adventures and follow them on Twitter: @ISBA_Olin and #OlinISBA.