"Survival is not mandatory" is another way of saying, "inadvertent suicide is an option." The subject may be your firm or your country's economy--does that sound overly dramatic? The evidence speaks to the peril if the exodus of U.S. manufacturing continues along its present trajectory. Steve Williams begins his book, Survival is not Mandatory: Everything a CEO Needs to Know about Lean, with a statement of fact:

"The following information from the CIA's World Factbook should scare the hell out of you. Using the metric of Services as a Percent of Gross Domestic Product (GDP), in the year 2000 the United States led all industrialized countries at 80%. Simply put, 80% of our revenue as a country comes from service-related industries and only 20% from manufacturing. The data provided by the Handbook of U.S. Labor Statistics for the percent of the U.S. labor force in each sector are equally disturbing. Using 1950 as a baseline, 60% of U.S. employees worked in the manufacturing and 40% in the service industries. By the year 2000, this mix had changed to only 20% in manufacturing and 80% in service."

U.S. manufacturing is hollowing-out as the Japanese would put it, but I want to play devil's advocate for a moment. In the July-August 1991 Harvard Business Review (HBR), Rappaport and Halevi argued that loss of manufacturing is a good thing:

"The strategic goal of U.S. companies should not be to build computers. It should be to create persistent value in computing. Increasingly, computers themselves are marginal to the creation of value in computing. Defining how computers are used, not how they are manufactured, will create real value--and thus market power, employment and wealth--in the decades ahead."

So which is right? Steve Williams who equates loss of manufacturing to suicide or the gentlemen who celebrate it in the HBR? I think that it is a false issue because they each stimulate the other. IBM loves services--"solutions" they can resell without new investment, but still makes mainframes and servers. The Internet has created new applications and also the need for new varieties of hardware.

The human impacts of loss of manufacturing may be seen in the loss of opportunities to make things. The social loss is that without real production of real products, innovation will suffer from the lack of experience to feed it. I think that this is one conclusion that will justify Steve Williams' alarms.

We may use U.S. patents as a gauge of innovation--the U.S. share of the total for all U.S. patents pre-1994 was 57%. In 1997, it was 55%; not a drastic drop, yet, considering the inadequacies of education in the U.S.

Williams' book is a manual for accomplishing Lean, citing savings to GE, Honeywell and Motorola. The incentives are significant, perhaps enough to induce capital to invest in manufacturing again. Danaher Corporation is often held up as a sterling example. The $10 billion conglomerate is so dedicated to Lean that it uses it as tool for evaluating new acquisition investments and for opportunity to increase value. When they acquired Fluke, GM was 8%. Danaher introduced Lean and raised GM to 20%.

With incentives like that, U.S. companies might have capitalized innovations, now departed, that would have made the U.S. a stronger country. That leads to a concluding thought that Steve Williams might consider developing in his next edition.

By way of background, Steven Williams is Commodity Manager at Plexus Corporation, a EMS provider with $2 billion in sales, for Printed Circuit Procurement. Before that position, he worked for 22 years in the PCB industry--so he knows both printed circuit fabricaiton and assembly and their relationships.

Most of the applications of Lean have been on the assembly side, whether in automobiles or stuffed PCBs. Fabrication, the way it is done now, is a much more complex process with many steps. It combines discrete manufacturing with process. Can Lean contribute to increasing reliability and reducing cost of fabricating PCBs? FTG, Sanmina, Hunter, Triangle, Molex, All Flex, EPEC and TTM claim it can.

To download a copy of Survival is not Mandatory, visit http://www.survivalisnotmandatory.com/.