Manufacturing is experiencing a renaissance. Though the common wisdom since the 1990s has held that manufacturing is inexorably moving away from developed economies and in many instances was shrinking altogether, manufacturing companies are now discovering new ways to reinvigorate and even expand their operations. These fundamental changes are the result of company responses to tectonic shifts in the global economy, including an explosion in customer-focused technology, rapid improvements in the areas of logistics and project management, and a growing pool of human capital made possible through changes in technology and global education.
Executives and directors in the manufacturing industry are finding that this paradigm shift deeply impacts the strategic vision and direction of their organizations. Increasingly, directors are being asked to weigh in on detailed strategies aimed at improving customer-focused innovation (including outward- and inward-facing social media strategy); the engagement, development and retention of human capital; continuous process improvement; supply-chain management and collaboration; business and industry sustainability (including waste and energy-use reduction); and global engagement (having partnerships and systems in place to engage global markets and talents better than the competition); as well as myriad other issues related to the next generation of manufacturing.
To keep up with the opportunities and risks associated with this next generation of manufacturers, boards of directors of manufacturing companies need to better understand this quickly evolving environment so that they may quickly assess the strategic opportunities and the associated risks. Advice and guidance from next-generation manufacturing experts will be more and more necessary so that boards can keep pace with their fiduciary duties relating to this new and ever-changing dynamic. To start, directors in the manufacturing industry would be wise to familiarize themselves with the literature on next-generation manufacturing, beginning with the 2011 Next Generation Manufacturing Study prepared by the Manufacturing Performance Institute in collaboration with the American Small Manufacturers Coalition.
Whether or not the renaissance of U.S. manufacturing continues at its current rapid pace, the broadened duties of executives and directors overseeing the growth of manufacturing companies are real and here to stay. Because companies, industries and economies are increasingly interconnected (often on a real-time basis, via JIT supply chain management, customer-focused innovation enabled by social media, and world-wide telecommunications capabilities), a failure to respond to the issues in a timely manner can not only slow a company’s growth, but can also leave a company lagging far behind its global competitors. To survive, a company needs its directors and executives to be fully engaged.
In part to identify those directors best responding to the 21st-century global business environment, Foley & Lardner LLP has created a new Director of the Year award. The award, which is not limited to any particular industry, is intended to recognize outstanding directors who have demonstrated exceptional value to a board, management team, and company. (View the one-page nomination form for more information and to nominate a director by August 26, 2013.) By acknowledging these exceptional individuals and their paths to success, this award can help inspire and encourage other directors to strive for similar greatness and raise the corporate governance bar for other directors and boards.
Originally published on boardmember.com.