The human element of supply chains in American Factory (2019)

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This summer, we’re going to the movies! Management experts from McGill University analyze popular films and share the lessons that lie within them.

During the 2008 financial crisis, General Motors (GM) closed the doors of Moraine Assembly, yet another automotive factory in America’s Rust Belt. This rocked the local community, and workers struggled to find income comparable to their unionized wages.

Eight years later, Chinese glass manufacturer Fuyao reopened the factory. The Oscar-winning documentary, American Factory (2019), details this transition as Fuyao brings new operations and new management to Ohio’s working class.

For Rob Glew, an expert in operations management and assistant professor at Villanova University, American Factory is a striking example of how a well-designed operational model can clash with the messiness of real human behaviour. Glew shared his insights on the film in an interview with McGill Delve.

Supply chains and operations are often thought about in terms of systems, he said. But we often forget people run these systems, and people don’t always behave as expected. Glew’s own research focuses on this dissonance between the model and the messiness. More specifically, he studies how human behaviour affects the performance of those systems and how to design around that unpredictability.

This same dissonance was on display in the documentary. Fuyao’s operational model, despite its proven success in China, didn’t work as expected when transplanted into an American factory with American workers.

“Culture and social psychology wrapped up into manufacturing and work, all portrayed in this beautiful 90-minute documentary,” Glew said.

Culture clash

American Factory documents the interactions between American workers and a factory’s new Chinese management. It wordlessly pivots between the American and Chinese perspectives, telling a story of two different work cultures forced to reconcile.

On a personal level, the documentary shows positive instances of cultural exchange, Glew said. American managers show their Chinese counterparts a taste of American life. The audience watches scenes of fishing, the shooting range, and even a Thanksgiving meal. The Chinese managers seem to enjoy this experience of American life, Glew said.

However, on the factory floor, the two different work cultures produced clash after clash. Fuyao’s management practices, while normal in China, were a marked shift for its American employees. The American factory workers had to learn new skills, producing glass windshields to be sold to car manufacturers. This is a hazardous job involving long hours, heavy machinery, high heat, and sharp materials. And the workers were expected to match the output of Fuyao’s Chinese factories – an expectation they struggled to meet amid difficult working conditions. The American workers grew frustrated with management as a result.

These frustrations weren’t one-sided. In the film, Fuyao’s management is shown growing impatient with American workers, citing what they saw as a lack of speed, attention to detail, and even work ethic.

For Glew, the issue isn’t with one work culture over the other. Fuyao’s operational model was built for a different workforce and failed to adapt to the new one in Ohio.

“You can’t just pick up something that works one way in the world, and move it somewhere else with different people, different economics, different pressures,” Glew said.

The Fuyao operational model didn’t immediately work well in America, and that failure wasn’t the Americans’ fault for not being Chinese, he said.

“We’re all fundamentally quite similar, but the cultures that have been built over thousands of years simply prioritize different things,” Glew said.

The documentary itself also chooses not to valorize either work culture.

“The point is that there are weaknesses in both,” Glew said.

Missing manufacturing knowledge

Work culture isn’t the only place where the Fuyao models meet the messiness of the real world. Certain steps in the manufacturing process had simply never been done in the Ohio plant before Fuyao, Glew said.

For Glew, this gap speaks to a wider challenge in American manufacturing. For years, Chinese companies have refined and modernized their production processes, eventually outperforming their American counterparts.

A critical area where China excels, and Americans lag, is in machine toolmaking. To produce a tool as simple as a screw, you need a machine to produce it, Glew explained. This machine itself is also a tool, aptly called a “machine tool,” and is foundational to any manufacturing operation.

“There are fewer than 100 people in all of America who are fully skilled and qualified machine toolmakers,” Glew said.

The people who can build the machines that build other machines are essential to any supply chain, and America has barely any left.

In American Factory, Fuyao eventually moves to automate parts of their Ohio factory. They use their machine toolmaking skills to reduce their dependence on American human workers.

The missing machine toolmaking skills in America are just another way that people can have an outsized effect on the operations of a company. For Glew, understanding the role of humans – with their invaluable skills and complex interpersonal dynamics – is where operations research can make a valuable contribution. With more knowledge, operations managers can better account for human behaviour in their supply chains, and find new ways to bring them in.

“As we get better as a field at collecting data and spending time in the real world, we’re learning ways in research to combine these two things,” Glew said. “To include the way humans behave not as a disadvantage to our systems, but as an advantage.”

For more insights on American Factory (2019), watch the full interview with Rob Glew.