Rebuilding American Manufacturing: Insights from Miles Arnone

“When you cut that cord and move that production far away, it can become really hard to collect that information to inform your design work. The ability of the design firms to operate at a very high level is reduced. You’re facing a competitor that’s native in your product better than you are.”

Miles Arnone

CEO, Re:Build Manufacturing

Links:

• Follow Miles on LinkedIn: https://www.linkedin.com/in/milesarnone/
• Learn more about Re:Build Manufacturing: https://rebuildmanufacturing.com/16-principles/
• Follow Re:Build Manufacturing: https://www.linkedin.com/company/re-build-manufacturing/
• Learn more about the Reindustrialize Conference: https://www.reindustrialize.com/

Episode Highlights:

On company principles vs. mission statements:
“When you visit a lot of companies, they’ll have a mission statement, something like, ‘to serve our customers with a high level quality, and as well as possible.’ Our principles are meant to be more first order fundamental beliefs, as opposed to a goal statement, how do we need to behave? How do people need to treat each other in the company, in the community, our vendors, our customers, to be successful over the long term?”

On long-term decision making:
“If something will increase our profits this year, but hurt us over the next three, we never do it.”

On the impact of offshoring on product design and innovation:
“You learn a lot from making something as far as shaping how you will design it or improve it for the future. When you cut that cord and move that production far away, in terms of time, distance or other barriers like language or culture, it can become really hard to collect that information to inform your design work… the ability of the design firms to operate at a very high level is reduced.”

On the importance of manufacturing to democracy:
“We need to be able to build products and have manufacturing in this country because without it, we can’t provide good jobs and a good future for people to participate in our system. Democracy is expensive. It costs a lot to run a democracy more than to run an autocracy. And so we need a very well functioning economy to make that happen.”

On the challenges of reshoring manufacturing:
“Once a supply chain has migrated offshore, it’s very hard to bring it back. It’s a large systems problem. We are very unlikely to reshore Happy Meal Toy production. Everything you need to do it now, the design, the production, the piloting of it, all of that is not resident here.”

Re:Build’s “hard-tech” startup customers:
“We’ve chosen to focus on working with hard tech startups and hard tech innovators in the U.S. to try to ensure that their newest products and services that they develop don’t migrate.”

On Re:Build’s approach to cost-sharing with customers:
“We want to proactively share with the customer 70 percent of the savings we generate and retain 30 percent for ourselves after any fixed cost we might have to incur like capital or some special things of this nature. The reason we drove that is because we want to be able to have a truly collaborative relationship with the customer and also a transparent one.”

On Re:Build’s approach to customer relationships:
“Our goal is always for our customers to be getting the product at the right level of quality, on time, as inexpensively as possible. That will make them more profitable. That means they’ll be more work for us.”

Rejecting the practice of profiting from contract technicalities:
“I don’t want our business to be in the business of making its money on the footnotes, like in the margins of the contract.”

On the importance of local cultural understanding in business:
“We think of our system, Re:Build, as kind of a federal system. Like, each of our member companies is like a state. States like Massachusetts has a different culture than Texas, has a different culture than California, than Montana, and you allow that and you happily want that. You want to promote that culture because it leads to some goodness.”

On Re:Build’s internal collaboration strategy:
“Every Re:Build employee is on the same incentive plan. Every Rebuild employee owns the incentive plan shares or options if they have invested in rebuild the overarching business, not their local entity. They get part of their cash bonus and option bonus based on how much collaboration was done by the member company of which they’re a part.”

On adapting Japanese Keiretsu-esque management styles to American culture:
“Americans really value their independence, almost above all things. If you tell an American that they don’t have the freedom to make a decision about something, they really don’t go for that.”

Emphasizing the importance of practical manufacturing knowledge over high-level software solutions:
“What’s needed is a focus on the tactical work of making things. That requires subject matter expertise. The people we met at that conference largely were people that had pure software, in many cases pure e-commerce backgrounds, believing they could take that knowledge and apply it in a general way to manufacturing and solve a problem. But they’re chasing a problem that I think doesn’t really exist, they’re sort of creating. The problem is, again, the tactics… We’re focused on developing software that solves those kinds of problems. For example, software that is tied intrinsically into production equipment, and monitors the variables of that production equipment, and helps us to adjust the production process in real time. Not how long has my spindle been up today? Kind of basic stuff, but much more fundamental data collection and decision making.”

On Re:Build’s approach to implementing technology:
“We’re much more a fan of an incremental, give me value in the near term approach to win hearts and minds and get people on board with the idea that this voyage towards that wonderful digital thread future is a good journey.”

“We use LEAN, Continuous Improvement Through Respect for People. We do what are called Rapid Improvement Events and other types of events to drive improvement in the business. And we just altered our Rapid Improvement Event Template so that every Rapid Improvement Event has as a part of its goal setting, what are the improvements we’re going to try to get for the customers and what’s going to be their magnitude.”

Miles Arnone