Wednesday, June 4, 2014

The Problem of Lost Technology: When Proctor & Gamble forgot how to make Ivory Soap

Back in the mid-80s I became friends with a very brilliant mechanical engineer.  Lou Gibbons loved to work on cars.  He loved gadgets.  He programmed robots for GM plants in the northeast and was an expert at designing assembly systems to reduce costs.  The guy was great and he was never at a loss for words.  Until he was assigned to an Ivory Soap facility.

I had known him up to this time for about a year or so.  His career had had some interesting bumps in the road. He once taught at a local junior college in another state where one of his students engaged him on the future of robotics. The subject segued into employment and replacement of workers.

"It was just a normal conversation you have with a student.  Sure, workers would be replaced.  But other workers would be needed to maintain the robots, build the robots, design the environment.  The net loss would be negative, zero or only slightly positive."

I may be putting words in his mouth since the conversation was about 30 years now.  But the gist was that there was nothing remarkable about the conversation.

"Gary, I had no idea the student was really a reporter for the local newspaper."  He let the air out of his lungs during a long pause.  "The next day, the front page of the local paper top bold headline read: 


"My reputation and career were ruined.  I finally made the decision to leave the state and start a new life with my family."

About a year later Lou helped me rebuild the engine in my "sporty" 1981 Dodge Colt.  I think that was the last car you could see through the engine compartment all the way to the ground.

Lou was back briefly from a project in Cincinnati.  Fluor-Daniel had a long term contract with Procter & Gamble to assist in various plant and product upgrades.  We sat together during a break, both sipping on nice cold glasses of sweet ice tea (which in the South is only known as "ice tea")

"It ... was the oddest thing."  Lou looked perplexed, searching for the right words, his wide handle bar mustache seemed to follow his furrowed eyebrows in expressing bewilderment.  Lou, at a loss for words. It didn't seem possible.

"P&G forgot how to make their Ivory Soap."  He looked off into space.  Then he turned looking at me, finishing his sentence.  "And I had to show them how to make it all over again."

I'm not an expert on soap making, but most likely, you could divide the process into two parts: Soap formulation and soap bar forming.  Lou was involved in the latter.  It was the back end where they made the bars of soap that was the problem.

"All of their experienced engineers and operators had retired.  The new guys they hired were inexperienced.  Yeah, they were cheaper, but the bar production line was a disaster." If I recall what he said, it was a classic case of fixing something that wasn't broken.

"The young engineers just thought they knew better.  The whole line from extrusion, to cutting, to packaging was a mess.  Stacked bars of soap were falling all over the floor.  The operators weren't properly trained.  The engineers thought they could do a better design.  But it was a disaster."  Production was slowing.  Downtime had greatly increased.

Fluor-Daniel, our employer was called in to assist in re-redesigning the line.  Lou was sent to help troubleshoot.

"The automated system cut the bars right off of extrusion, stacked them, then transported them."  He explained that the stacked short bars had no stability and were always falling over.  They had to stop the production line frequently to retune the automation.

"I had to redesign the facility so that an intermediate cut was made such that the bars were very long.  These longer bars had better stability for transporting and never tumbled.  Then before packaging, the bars were automatically cut to length, then wrapped and packaged.

"It was after the re-engineering of the automation process and I started the operator training that it dawned on me: I had to teach P&G how to make soap!"

That conversation intrigued me to no end.  How do you lose the ability to make something you made for decades?  But here I was facing the reality that it could happen.  That it would happen again.

I never forgot that conversation and mulled it over for years. I extrapolated his experience to other areas, such as electronics production.  As more and more of our operations were sent to China and Japan (at the time Japan was considered a real threat), what did that mean to us here?

What it meant was that if we ever wanted to make a certain product in the USA again, it was not going to be easy.  And maybe even impossible.  All of that experience. All that knowledge.  All gone.

At the time I coined the phrase the Problem of Lost Technology.

And here we are.  The circle is complete.

Walmart, in trying to sell "Made in America", is finding Made in America left a long time ago.

Companies that make the leap have to grapple with a host of challenges, including a shallow pool of component suppliers, an inexperienced workforce, and other shortcomings that developed during the country's long industrial decline.

"A lot of the tribal knowledge and skill sets are gone because the humans who used to do that work have either retired or died," says H. Kim Kelley, the CEO of Hampton Products International, a privately held maker of locks, lighting and other household hardware. The Foothill Ranch, California-based company began selling products made in Asia to Walmart in the 1990s and is now supplying it with some U.S.-made products.

Trying to rebuild that manufacturing capability, while making products that meet Walmart's standards, can require companies to “start from scratch,” Kelley says.

Cindi Marsiglio, the Walmart vice president overseeing the U.S. sourcing push, says the retailer and its existing suppliers have 150 active reshoring projects in various stages of development. For all too many, she says, finding U.S.-made component parts has emerged as a vexing problem.
What really makes me mad is I saw this coming.  And if I saw it coming, others did, too; people in positions who could  do something about it.

And they did nothing.

And here we are.

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