How a Decaying Infrastructure Hurts U.S. Manufacturing

How a Decaying Infrastructure Hurts U.S. Manufacturing

Jun 5, 2015

By Rosabeth Moss Kanter, Wall Street Journal

Make or buy all that you want in the U.S., but if the transportation system doesn’t work, your business will suffer. That’s why the U.S. must address the huge problem of decaying infrastructure.

Manufacturing is physical—not virtual—regardless of the amount of digital technology used to organize, guide and control it. It is dependent on places and the transportation connections among them. Even if research and development can happen on computers, even if simulations can substitute for prototypes or prototypes can be made on 3-D printers, and even if parts can be sourced from anywhere in the world by employees sitting in any part of the world destined for customers in any part of the world, physical objects must move from place to place.

But what if goods can’t move to markets in a timely, cost-effective way? What if supplies are held up by a port strike on the West Coast or freight railroad congestion in Chicago, through which a quarter of America’s trains pass? What if employees can’t get to work without long, frustrating commutes? What if a potential workforce lives in inner cities with poor public transit access, while the jobs are in the suburbs and exurbs?

When suppliers can’t move goods and employees can’t get to work, then manufacturing firms are vulnerable. On recent Harvard Business School U.S. Competitiveness project surveys, logistics and infrastructure remain areas in which the U.S. is falling behind other nations. Yet logistics is increasingly the lifeblood of manufacturing, as companies increase their dependence on supply-chain partners. The strategic advantages that come from supply chain in turn depend upon the smooth operations of transportation systems, including trucks and other cargo carriers, and the quality of the infrastructure on which they run. Supply-chain management has become a route to the C-suite, as I heard at the recent summit held by AWESOME (Achieving Women’s Excellence in Supply Chain Operations, Management and Education), a three-year-old network encouraging the best and brightest women to work in this field. I urged them to become advocates for big investments in renewing and reinventing America’s transportation infrastructure.

There are many good reasons for an emerging manufacturing renaissance in America: efficiency and productivity in manufacturing through the use of technology; increasingly competitive wages; and proximity to America’s large markets. This combines with a values shift that makes buying locally a priority for some millennials, especially in food consumption. But this renaissance and the good jobs it produces will be limited without equally excellent transportation.

Modern manufacturing has tended to be located in the outskirts of cities, particularly in exurbs along interstate highways. That might help the movement of goods, but as I saw in Chicago, a Ford plant on the far southern boundary of the city almost closed, taking thousands of jobs with it, because of the extraordinary traffic congestion and hourslong delays caused by multiple lines of railroad tracks crossing one another from different directions and all of them crossing roads. I also saw the new infrastructure–a prefabricated bridge and a modern underpass–that was freeing up traffic and promised an urban park nearby. The plant stayed.

It’s possible that manufacturing comes back to cities in a bigger way than handcrafted objects in the art centers that now occupy former urban warehouses. Some inner-city manufacturing plants have been repurposed for innovative uses such as urban aquaculture, growing fish and vegetables in a closed ecosystem in a former plant in Milwaukee. Perhaps vertical factories will become the norm, and perhaps new manufacturing plants will be as beautiful as the Genzyme plant on the banks of the Charles River in Boston, near Harvard’s historic buildings. It is sometimes harder for urban factories to be productive if people are stuck in traffic or lack public-transit access.

The success of manufacturing still depends on transportation. It’s time to invest in making U.S. infrastructure as good as its products.


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