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Made in America: Regaining the Productive Edge.

Made in America: Regaining the Productive Edge, by Michael L. Dertouzos, Richard K. Lester, Robert M. Solow, and the MIT Commission on Industrial Productivity. Cambridge, Mass: The MIT Press, 1989. Pp. 345.

I have chosen to combine these two books in a single review because they go together like two volumes of the same set. In fact they have something of a common source. Both are the products of MIT study groups. Made in America is based on the research of the MIT Commission on Industrial Productivity. The Machine That Changed The World is based on the research of the International Motor Vehicle Program (IMVP), an MIT, five year study of the future of the automobile.

Made in America reports on the results of a study of eight U.S. manufacturing industries. The study is meant to cover a representative sample of manufacturing industries and is intended to answer the questions, is U.S. manufacturing in trouble, and if so, what went wrong, and what must be done to fix the problems?

The authors have done a superb job sifting through what must have been mountains of data to conclude that U.S. manufacturing is indeed in trouble and to identify the root causes of the problems and the necessary fixes that must be applied if U.S. industries are to regain the competitive edge. Six causes for the decline in U.S. manufacturing are identified, outdated strategies, short time horizons, technological weaknesses in development and production, neglect of human resources, failures of cooperation, and government and industry at cross-purposes. Five imperatives are identified as necessary for improving productivity: a focus on the new fundamentals of manufacturing, cultivating new economic citizenship in the work force, blending cooperation and individualism, learning to live in the world economy, and providing for the future. The authors go on to recommend specific strategies for industry, labor, government and universities.

This work is clearly the definitive text on what ails U.S. manufacturing. If it lacks anything it is detailed examples from each industry in support of each of the identified problems and recommended solutions. For example, it would be very valuable to know exactly how the steel industry was guilty of neglecting its human resources and how it might cultivate a sense of economic citizenship among its employees. Such elaboration, however, is clearly beyond the objectives of the authors and would make the work several volumes longer.

It is this desire for additional details on exactly how things went wrong within a specific industry that makes the second book so valuable. The Machine That Changed The World examines the auto industry in exquisite detail. Every facet of the industry from product conception to customer delivery is examined and reported on with a wealth of concisely summarized data that leaves nothing to the imagination.

The authors of Made in America, after discussing the general question of whether or not U.S. manufacturing is in trouble, concluded that the summary productivity data may not be conclusive. To be convinced of the problem, they said, one has to go into the factories and on the shop floors. It is there, they feel, it becomes abundantly clear that U.S. manufacturing has lost the competitive edge. The Machine That Changed The World is that trip through the factories and shop floors. The precise productivity disadvantages suffered by U.S. firms in engineering, manufacturing processes, supplier performance, labor utilization, and a host of other areas, are neatly displayed and discussed.

The spectacular performance of the Japanese companies provides the illuminating contrast. The study group coined the term "lean production" to describe the production system employed by the Japanese and to distinguish it from the mass production system employed by U.S. producers. According to the authors, the Japanese producers saw a world market made up of a great number of niche markets, each with its own peculiar product needs. They, therefore, structured their manufacturing systems to produce a wide variety of high quality vehicles. The Americans, on the other hand, saw a largely unsegmented market and remained tied to the mass production of very large volumes of relatively few models, of relatively lower quality.

These very different views of the market lead to different investment strategies, different production strategies and different marketing strategies. The authors make it clear that the American model was very successful for a very long time. They also make it clear that this is model whose time has long since passed.

Like the first book, this one also is the definitive work on its subject. It lacks nothing but specific identification of individual companies' performances, something which the study group had to promise not to do as a condition for getting the kinds of inside information they received.

Both books are remarkably easy reading and richly rewarding in their content. Each is a must for anyone seriously interested in the state of manufacturing in the U.S. today. Thomas J. Cawley, U.S. Military Academy, West Point
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Author:Cawley, Thomas J.
Publication:American Economist
Article Type:Book Review
Date:Sep 22, 1991
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