Recently, Time Magazine asked “What Can America Make?” When the mass media discuss the dire state of American manufacturing, you know it’s a big issue. Years ago Japanese manufacturers threatened with higher quality products often sold for less. The response was the Quality Revolution. US manufacturers embraced Quality Circles, excellence, TQM and other methods, or they didn’t survive.

Now, the world is more inter-connected and complex. But we’re beginning to see a response that, while hardly as widespread as the Quality Revolution, is nonetheless spirited. “If you can’t manufacture in the U.S. efficiently and economically, you don’t know how to manufacture,” says LeRoy Nosbaum, CEO of Itron Corp, a Spokane, WA maker of utility meter readers.

Itron is part of the Manufacturing Vanguard, companies who are passionately engaged in competing with their strengths, not weaknesses. (Patricia Panchak, editor-in-chief of Industry Week, says in a recent column: “Many manufacturers are so worried about competing on cost, their greatest weakness, they fail to compete on innovation, their greatest strength.”) Vanguard companies consistently move up the value chain and rethink their innovation approaches, much like they did with their quality process. They make innovation an embedded, all-the-time process, and involve everyone in the quest for better ideas.

Every industry has a few mavericks like Itron that out-think competition when others hunker down. Their leaders don’t wring their hands, or look to Washington for relief. Their mantra: this may be the biggest challenge in a generation but let’s roll up the sleeves and go to work. Based on my study of Vanguard companies and conversations with CEOs, here are four suggestions to start the Innovation Revolution in your company.

BROADEN YOUR DEFINITION OF INNOVATION

Here’s a common refrain: “I know we’re supposed to create awesome new products like other industries, but in our industry, that’s a tall order. There’s only so much you can do with our products.” Discussion usually ends there.

Actually, it should begin a whole new type of brainstorm. If you assume innovation is merely a synonym for new products, think again. What about strategy innovation, such as entering new markets with your existing products? What about supply chain innovations? What about value-adding service enhancements that allow real time responsiveness, make the customer’s life easier, and otherwise tackle the customer’s problem in ways competitors are unable or unwilling to do? Such strategy innovations are a bold new frontier many firms have never pursued.

If everyone in your industry pushes the envelope in the product realm,  do what Dell Computer did and innovate in the strategy realm – serve customers direct. Another example: furniture maker Herman Miller, based in Zeeland, MI, bundles more of its products into total solutions for the end customer, rather than just developing new products. The combination is harder for competitors to copy. The key: broaden your definition to include not just products, but services, service enhancements, processes, technology, and strategy initiatives that grow  top and bottom line revenue.

GET SERIOUS ABOUT PROCESS INNOVATION

Process innovation includes TQM, Lean, ISO, Six Sigma and other methods for increasing productivity and cutting costs. Even though you can’t cost-cut your way to prosperity, redoubling efforts at process innovation isn’t a luxury, it’s a necessity.

Think of productivity growth as an index of process innovation. Ask yourself: are you satisfied with the rate of improvement in business practices, space utilization, and manufacturing efficiency?

Between 1995 and 2000, manufacturing productivity rose an average of 4.3% annually, according to the  Department of Labor, compared with 2.2% for the non-farm economy. This is impressive, but it’s only a start. More efficiency and productivity can be gleaned. How have you increased productivity above your industry’s average? Successful US manufacturing requires relentless focus on process innovation, but not at the expense of product and strategy innovation.

BENCHMARK INNOVATIVE MANUFACTURERS

When was the last time you visited another manufacturer that is defying the trends, and thriving? The time you spend benchmarking could provide motivation you need to generate your next breakthrough idea. Become active in your trade association and attend conferences to gather new ideas and meet progressive manufacturers.

There’s no such thing as a mature market or commodity product, only tired imaginations. Your greatest asset in this situation is your ability to inspire fresh thinking experimentation, and assault the “this is the way we’ve always done it” assumptions. Benchmarking enables you to do that.

UNLEASH THE CREATIVITY OF YOUR PEOPLE

Your skilled workforce is a competitive advantage – but only if you see it and engage people creatively. Of course, you already need to produce more with fewer people. Yet few manufacturers tap the mega-asset of people power.

Not so at B. Braun Medical, a medequipment maker in Allentown, PA. Braun went through an automation project to rethink and redesign how it produces syringes and intravenous clamps. It used workers’ creative suggestions to reduce error rates producing a vastly superior sterilization process that became a competitive advantage to customers, more important than price. “The more innovative you are, the higher your pricing power,” B. Braun’s CEO Caroll Neubauer told Time.

Appleton Paper of Appleton, WI goes further. Appleton involved all employees not just for cost-savings ideas, but for new product and new market ideas. In a recent year, this approach generated 700 ideas! “We already had a suggestion program for cost-saving ideas,” explains Dennis Hultgren, Appleton’s vice president. “With GO [Growth Opportunities], we now regularly solicit ideas from everybody in the company. These people are out there, they know our technologies, and they are perfectly capable of thinking up new uses for them. What we’ve learned is that it’s important to bring everybody in on it. Everybody wants to contribute if asked, but not everyone was being asked.”

CONCLUSION

Recent improvements in factory orders might have some believing good times are returning, and taking bold action isn’t necessary. That’s a big mistake. What can USA manufacturers make? I’m convinced those who embrace innovation can make anything despite the uneven playing field.

But how they make it will change dramatically. Jack Welch, former GE chairman, said that if the rate of change inside your organization was less than the rate of change outside it, the end was in sight. You might have some initiatives but are they the right ones? What action will you take today to embrace the Innovation Revolution?

An internationally recognized leader in the field of innovation, Robert Tucker is a former adjunct professor at UCLA, and president of The Innovation Resource, a consulting firm specializing in helping companies invent higher growth futures. Tucker has authored four books, including his new book Driving Growth Through Innovation.