(This interview was conducted for Tech Talk by Naomi F. Chase on April 16, 1991, with William Hanson, vice president of logistics at Digital Equipment Corporation and Thomas Magnanti, Codirector of the MIT Leaders for Manufacturing Program.)
NFC: What is Leaders for Manufacturing?
WH: The Leaders program was put together four years ago by the Sloan School and MIT's Engineering School in partnership with 11 manufacturing companies. One goal is to ensure that manufacturing gets its fair share of the best and the brightest. Historically manufacturing has been undervalued and people have not always seen this as an opportunity for a career or appreciated its critical, strategic importance. The fact that MIT and 11 leading American corporate manufacturers recognise and value it as such really places manufacturing on the map.
NFC: What sparked the program?
TM: Concern that our manufacturing infrastructure has been eroding and the nation was losing its leadership in manufacturing. MIT has always dealt with important societal problems and this one was central. We sensed we had to think about new educational models, new collaborative models, to ask if our nation is using its resources to its best advantage. It was an opportunity to develop a novel partnership with industry in a new type of learning environment. Because the problem seemed to encompass both engineering and management, we decided to bring the two schools together. We thought MIT could and industry could learn alot from each other.
NFC: You told me you were skeptical in the beginning.
WH: Yes. I thought the program organizers might come up with a short-term fix and not recognize that this was a 20-year problem.
NFC: Exactly the point made by the MIT report, Made in America, isn't it, that the short-term view is a big part of the problem. How do you approach it?
WH: In order to be a competitive manufacturer, you have to get the whole organization-engineering, finance, design, marketing, manufacturing-all working together. American industry often lost sight of the whole and zeroed in on the pieces.
NFC: By saying "lost sight of," you imply that American industry had that view before. Are we talking about a before and after here, or a set of circumstances that changed manufacturing?
WH: There obviously have been periods when we were competitive manufacturers. Clearly the automotive companies were.
NFC: But they had no competition, did they? Except with each other.
WH: We had no competition because everybody was happy with the solutions we were providing. What breeds competition is someone else offering the customer a better solution. We can pick any industry and say that the solutions we were providing our customers were no longer competitive, that some other company or some other country came up with a more competitive solution. Generally this solution comes because there is an external focus on what the customer needs as opposed to an inward focus of maximizing the internal functions.
NFC: How does the Leaders Program approach these problems? And what's different from the way MIT and industry have worked together in the past?
TM: In the past the interactions between MIT and industry have been much more superficial. For example, industry might provide field sites for our work and some financing. Once or twice a year we'd report back to the sponsors. Leaders is a partnership, not a sponsorship; it's a real collaboration between MIT faculty and students, and 11 leading corporate US manufacturers.
WH: The students are a very important element of that partnership. They are the leaders we're training to ensure that companies of the future understand what it takes to be a competitive manufacturer.
NFC: How exactly does the program work?
TM: We have two governing organizations, a governing board and an operating committee. The governing board consists of vice presidents from our partner companies, deans of the engineering and management schools and a few senior faculty-people who can make resource commitments on behalf of all the partners, including MIT. They meet about three times a year to set the overall directions of the program. The operating committee which includes other senior executives from the partner companies and MIT faculty, meets bimonthly to carry out the program's broad mission.
NFC: I'm a student in this program. Who am I? How do I get here?
TM: You have to have an undergraduate degree in either engineering or science because we believe technological excellence is required for manufacturing excellence and you've got to understand technology. As a graduate of this program, you' will receive two master's degrees-one in one of five engineering fields and one from the Sloan School. You also have to be in the usual mode of MIT-among the best and the brightest. You have to be committed, to want to participate in the manufacturing enterprise and become a leader- big and little "L"-in the world of manufacturing. You have to be ready to address the critical issues. You have to want to use your grey cells to address the important intellectual issues.
NFC: For example?
TM: For example, how do you pull together the integrated enterprise? or how do you do shop flow control? The questions range from the myopic to the broad-based issues of how you manage and operate a technological enterprise.
WH: A big issue is that we don't know how to trust people who are not in the same part of our own organization. If we don't trust people in our own company, then it's really hard to develop trust with those in a different company. For instance, engineering and manufacturing are seen as two different disciplines and they don't trust one another. You can take that and expand it across the board. To be an efficient manufacturer we need the free flow of ideas between various groups and companies. We need to provide our suppliers with what may be historically seen as proprietary information. This demands a whole different level of trust and operating behavior.
NFC: How do you make that happen in thie LFM program? I've arrived. I'm the best and the brightest. Now what?
TM: You spend 12 months at MIT and then you go to one of the partner companies for six months and work as part of a team in a project that we've identified together.
NFC: Give me an example of a project. Let's say I'm sent to Digital.
WH: In our first class the issue was working with our suppliers. We were introducing a new technically advanced product, many of the parts of which were supplied by Motorola.
NFC: What was the product? Can you talk about that?
WH: The VAX 9000, a high-end machine using a whole new interconnect technology.
NFC: How does the issue of trust get defined for me, the student, in the dealings between Digital and Motorola?
WH: Motorola sells beepers. They communicate by phone and by beeper. Digital, on the other hand, sells computers. And we communicate by electronic mail. Those are two different cultures.
NFC: So the problem is what you call the interface?
WH: Right! In order to improve the flow of information, you have to break down those historic barriers. DEC has to learn how to use beepers. . . Motorola to communicate with electronic mail.
NFC: It might be easier if people just spoke to one another.
WH: Absolutely! That's trust, but we don't speak to each other very well.
NFC: What happened? How did the students learn to communicate?
WH: The students began to point out some of the differences between the ways Motorola and Digital communicate and operate.
NFC: How does management react to a student pointing that out?
WH: All over the map, some better than others. Motorola and Digital were able to understood that better communication would speed up information and technology and allow us a faster time to market. And the students documented that in their thesis.
Here's another example. The question is how you bet on technology, how you make an investment in a new process. Let's say you're going to go into surface-mount technology.
How does a company like Digital decide whether it's a wise investment to change to that techology? It means changing some fundamental production processes and investing enormous sums of money into it. Do you look at quality? At reliability. At the fact that you're keeping abreast of the technology and it's important to maintain a technology lead? These are the questions our students examined.
The problems are so big and complex that no one company can solve them. Digital brings some very practical experience to the party. The university brings its research. Our suppliers can bring other kinds of information. That's a key to improving all of our competitiveness-including MIT's. I think MIT will be a more competitive educational institution as a result of this.
TM: This is a fundamentally new model of education, in the sense of bringing together engineers and managers.
NFC: How can universities and companies profit from this?
TM: It all starts by developing an infrastructure that allows us to work together so we can work toward solutions. We're not going to solve the problems of manufacturing, education and research overnight. And it isn't a two-year project or a five-year project. We can't try to measure the program on some short-term effect. We have to understand that the intent of the program is not simply to place students-it isn't a recruiting program for students to enter industry. And it's very simplistic to think that research projects done between the university and the companies will necessarily revolutionize the world. If that happens, that'll be great. But what we're really seeking is the knowledge that we will create over longer periods and a change in behavior over time. We're not working for headlines.
With this program, we're revisiting what MIT is all about and that is to tackle important societal problems in a way that's consistent with the work of a major research university. That means the program has to have intellectual content. We believe that there's a discipline in manufacturing, that we need to work to discover it, that we're investing in intellectual capital, in faculty, in students. We're challenging ourselves in ways that we haven't for a while. I think it's very important that American universities do that.
WH: We often look for the big bang. The real big bang is steady change and continuous improvement. That's what causes you to be a competitive manufacturer.
TM: And universities have to adapt this mindset. American universities need to be introspective in the way that industry has been. We have no God-given right to be the best educational system in the world. Bill, maybe you could say a word or two about leadership. It's not just being the CEO of a company.
WH: I think leadership is having a vision for the future and creating change. Everybody can be a leader. You can be a leader as a CEO or an individual contributor. You can be a leader as a supervisor of an assembly line. Leadership is a function of vision and change. It is not a function of the size of the vision or change.
NFC: Why did manufacturing lose its luster, so to speak? Is it related to a series of cultural changes?
WH: When you say, "Why did manufacturing lose its luster?" you're asking that in terms of a discipline as opposed to, "Why did manufacturing enterprises become non-competitive?" Those are two different questions.
TM: The traditional view was that manufacturing simply made things and required no real intellectual genius required. Manufacturing was "direct labor."
NFC: That's one of the definitions of human beings: man the maker.
TM: For some reason we ended up losing this perspective or not really valuing it enough. I think some of it happened when we reduced manufacturing to individual pieces.
NFC: You mean like the assembly line?
NFC: So it's because you lose the interrelatedness that you have said is so important?
TM: Right. Right.
WH: Yes.. I think it's very much related to the evolution of enterprises. A hundred years ago things were pretty simple. You got a manufacturing organization, you got a few people who managed it and all of a sudden you had all these functional silos doing various things and manufacturing got lost at the bottom of it. You lost sight of what you were there for.
TM: We thought the genius was in the creating and not in the making. It became: "How do I manage an enterprise?" and not, "How do I make something?"
A version of this article appeared in the February 26, 1992 issue of MIT Tech Talk (Volume 36, Number 21).