We recently had occasion to attend retail's big show in New York City, put on by the National Retail Federation. The aisles were filled. The talk was low key and the interest intense. Certain words were repeated in booth after booth: supply chain, integrated information, RFID, logistics, solutions, on-demand business, innovation, business advantage...
Underlying those words was a message: The power in America is shifting, from a nation dominated by manufacturing, and then the wonders of the computer, to a world of commerce that is the forward edge of the products it sells.
Yes, you have to make something. Yes, you have to digitize the information accompanying the product. But you also must market the product and sell it. Retailing is the front line of many, many businesses. It is a core part of the supply chain and has become the battleground of new technologies like RFID.
Retailing is the engine that creates the demand for new products. Without demand the supply chain is an abstraction and manufacturing becomes an exercise in futility. If people don't want your product, all the software and hardware in the world won't create sales. If people at dealerships don't want your car, then your car is redundant. Indeed, if the only people who want your car are the managers and workers that make it, then you are in big trouble. The recent freeze out of non-Ford cars from Ford parking lots is a good example of desperate thinking along this line. Ford will not get healthier by this prohibition. It is a clarion call that smacks of failure.
Our entire national effort depends upon a synergy among manufacturing, commerce, and agriculture. If we break one part it does not mean that we can limp along on the remaining two. The stool falls. If we allow manufacturing to become a thing of the past, we as a nation will become a thing of the past. It will not be, "Do you remember the Packard, the Nash, the LaSalle, the Plymouth?" It will be, "Do you remember the days when we manufactured automobiles? Do you remember when what was good for GM was good for the nation?" Laugh, but we were once a major machine-tool nation, a major robot-making nation, a major shoe-making nation, a major electric appliances-making nation, and the king of steel and rubber, to name only a few.
How far down the ladder do we need to slip before we wake up? Do we want to wake up? Are we able to? Does anyone care whether we do? If we reanimated manufacturing, would it have a beneficial effect on the trade deficit? Would it have a measurable effect on our outsize national debt? Would it increase or decrease our ingrained dependence on oil? How would the Chinese like it? Do we care? Is reanimated manufacturing a viable idea or are we chasing smokestacks?
A more evocative question might be: Has anyone done it before? Yes, the Japanese and Germans came out of WWII with devastated manufacturing sectors -- and look at them now. We even helped. Before we started shutting it down, U.S. manufacturing, to a great extent, was an open book. In the mid-twentieth century we were so dominant an industrial power that we could afford to be generous, or thought we could.
Will there be reciprocation now? It is quite doubtful. If we want to save the American factory there is probably only one way to do so: roll up the sleeves and go to work.