I'm a bit of a counter-culturalist when it comes to the hype about Super Bowl commercials being entertainment and being something we “have to watch” or “have to discuss at the water cooler.” Bah, I don't pay attention to most of them.
I got a bit behind on the game when I paused the DVR to record the video and write this blog post about the coin toss snafu. So, given a choice between catching up by skipping parts of the game, I was skipping most of the commercials (which I did without the express written consent of the office of the commissioner of the National Football League, so I might be in trouble). One commercial did catch my eye – one by the company WeatherTech.
Here is the video of the commercial:
https://www.youtube.com/watch?v=7wTJwiPWb6I
For those who can't see the video, there's a series of bankers, consultants, and HR types who keep saying “You can't do that.”
Build factories in America? You can't do that.
Use American raw materials? You can't do that.
Hire American workers? You can't do that.
You can't do that. You shouldn't do that. You're crazy. The conventional wisdom says to chase cheap labor, building everything in the cheapest country possible and then pack up and move someplace else when wages go up.
I read the book Capital Moves: RCA's Seventy-Year Quest for Cheap Labor about ten years ago about RCA's efforts to chase cheap labor from state to state across America and eventually into Mexico (probably going eventually to China like most electronics). The more recent trend is people advocating moving from country to country… Jack Welch (that “turkey“) once famously said a company should put a factory on a barge that could be towed from place to place chasing cheap labor.
The downsides of chasing cheap labor include:
- Long, slow supply chains (high inventory cost, risk of obsolescence, and slow response to the market)
- Risks over intellectual property theft
- Slow development cycles if the factory isn't near product development and engineering
- Quality might be worse
- Environment costs
- Supporting political regimes that you don't agree with
Thankfully, more and more companies are looking beyond cheap labor to “reshore” back into the U.S., including GE with their appliances (those are big and expensive to ship from Asia) – hear/read more from NPR
For years, GE outsourced manufacturing of the water heater to a company in China. In 2009, GE did the math and, considering rising wages overseas as well as climbing transportation costs, decided to bring production back to the U.S..
WeatherTech has a page with the “How'd We Do That?” story and I'm sharing the “Why'd We Do That?” video below:
The CEO David MacNeil says “the trend of exporting American jobs must be stopped” and he sees products in stores “built 7,000 miles away” and blames “short-sighted management and buyers at large national chains” for this. MacNeil says his philosophy is that “If my neighbor doesn't have a job, soon I won't have a job.”
I'm glad that MacNeil and WeatherTech are bucking the trend. So are companies like VIBCO and Marlin Steel.
I don't know how much “Lean Manufacturing” is part of their approach at MacNeil… I couldn't find anything on their website or via Google. Lean is a huge part of the strategy at VIBCO and Marlin Steel, as it is at many others.
It might sound like protectionism to keep jobs here in the US… but it's just good business if you can figure out how to be competitive here.
Back to the “you can't do that” theme — what are the things people would say that about in healthcare?
- Zero hospital acquired infections? You can't do that!
- Zero waiting room time in the clinics? You can't do that!
- Get “door to balloon” times down to an average of 40 minutes? You can't do that!
- A culture where all hospital staff are respected by all and work together on improvement? You can't do that!
- React to reimbursement cuts and financial pressures by NOT laying off employees? You can't do that!
- Prevent all patient falls and pressure ulcers? You can't do that!
- Change the way leaders at all levels manage? You can't do that!
Thankfully healthcare has some leaders like Paul O'Neill and others who don't accept “You can't do that!” as answer… and there are many leaders like that at ThedaCare and in the Healthcare Value Network.
We *can* do it if we don't give up and if we change the way we lead…
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Good video, but I have to take issue with his notion that he’s somehow putting these social goods ahead of profit. I’m confident that he’ll find, if he hasn’t already, that the approach they’re taking at WeatherTech will yield *higher* profit than the alternative.
Fair enough. It sounds good to the public to say “we don’t care about totally maximizing our profits” or however it was stated.
I do agree that this all goes hand in hand. Was reading this morning about Costco paying its employees $21/hour while Sam’s Club pays $12 or $13. Costco has lower turnover and lower training costs. They are combining social good (more than a “living wage”) with long-term profits. It’s not either/or.
Exactly. I didn’t say that very well, but I believe he’s running his company for the long-term best interest, rather than short-term, and taking a system view instead of viewing it in isolation.
There was a project one of the TV new shows did a few years back where they built an entire house of “made in USA” products. They found two things: one, the added cost was minimal, about $7k for a 2000 sq ft home, and two, many of the products were significantly better quality, for example, the US-made nails didn’t jam up the nail guns because they had less variation in the binder that held the nails together–the extra cost paid for itself. Of course, the builder didn’t know that until that project forced him to find an American made nail–standard supply chain doesn’t carry them.
No problem. I think I got what you meant.
Great example of the house… slightly higher materials, but maybe less labor cost and better quality. I’d sign up for that.
I pushed my publisher to have “Healthcare Kaizen” printed in the U.S. instead of India. Higher printing cost vs. faster supply chain and less inventory. Turns out they are printed near Ann Arbor and a friend says that area is a hub of small-batching printing operations.
And I can’t go completely American-made (such as this MacBook made in China), but I’m happy to have found some American-made dress shirts. I blew it the last time I bought a few suits and missed out on the American-made Hart Schaffner Marx. Maybe next time.
Or maybe I should stop wearing suits! :-)
I’m not an American but I love his philosophy and wish more big companies shared this. Maybe we would have this big economic crisis…
I work at a big Dutch company (VDL) which has sort of the same philosophy and only has opened some factories in low cost countries on demand of our customers, but our director refuses to close any Dutch plant in favor of low cost labour.
He even demonstrated his passion of the Dutch industry by taking over the old Volvo-Mitsubishi assembly plant “Nedcar”. He believed that the 1500+ people there deserved better than losing their job. Now VDL Nedcar is going to build cars for BMW and both parties have the intention on a long-term relationship.
The company I work for prints and manufactures plastic and paper gift and loyalty cards. We have two facilities in the Chicago burbs.
Although all of our manufacturing and labor is here in the US not all of our raw materials are sourced here; hopefully a change in the near future. Our facility follows the 5S concept and we have several managers and executives that have been attending lean training. Currently we have a few managers working towards Six Sigma certification and we hope to obtain ISO certification within the next few years.
Although my organization has come a long way in the last few years, Rome wasn’t built in a day; we have a lot of work to do. Executive buy-in makes a huge difference when changing processes and procedures that have been in place for 25+ years. I am proud that I work for an American company that keeps Americans working and who treats their employees well.
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