Artisanal Manufacturing

13 March 2014


Artisanal
: Pertaining to or noting a high-quality or distinctive product made in small quantities, usually by hand or using traditional methods [1]

Artisanal Guild Halls -  Ghent, Belgium

Artisanal Guild Halls – Ghent, Belgium

Prior to the Industrial Revolution, almost all goods were either homemade or produced by artisans, such as blacksmiths, candle makers or coopers. Shops were almost always small: a master tradesman with perhaps a few journeymen and an apprentice or two. The extraordinary productivity that the industrial system offered soon overshadowed — but did not eliminate — the artisanal system. There is, and always has been, room in the market for producers and for goods that focus on addressing particular niches and needs.


In fact, over 55% of all American manufacturing establishments employ less than 10 people. That’s almost 164,000 small shops, all of which strive to survive in today’s global economy. And over 112,000 of those employ from 1 – 4 people.


Over the years 1998 through 2011, the total number of American manufacturing establishments has decreased by 70,606. Surprisingly, the rate of attrition increased as the size of factory increased. As you can see from the table labeled “American Manufacturing Establishments Lost 1998 – 2011[2], the bigger they (were), the harder they fell!

Capture - Factories Lost 1998 - 2011

Obviously, these little guys (less than 10 employees) have something to teach all of us about a primary requirement for Sustainability — thriving in perpetuity [3] — the resilience necessary to survive across the business cycle.


This is the first of an on-going series of posts that focus on these very small manufacturing establishments. I have elected to refer to them collectively as “Artisanal Manufacturers”.


Four Change Drivers


Four Change DriversAn earlier post to this blog [4] proposed that four primary change drivers are affecting the direction of manufacturing today.  Examination of those change drivers suggests that conditions for small, focused Artisanal Manufacturers are continuing to improve!


>> Globalization – Apparently, Artisanal Manufacturers serve market segments in which their product offerings can be successfully differentiated. This is counter-intuitive, since, generally speaking, smaller manufacturers are less productive than larger rivals, domestic or foreign [5].


Given a sufficiently differentiable product offering, Globalization may afford access to customers and suppliers abroad, driven by simplified international customs procedures and by technical advances that enable global interaction.


>> Sustainability – The Green Revolution, with its emphasis on environmental awareness, natural qualities, toxicity concerns and humane perceptions, provides new dimensions through which differentiation is possible.  


>> Technology – Computer technology and the ubiquitous internet provide convenient means for global communications and for access to business services (such as graphic design). Social media enhances interpersonal understanding on a global scale. Methods for rapid international transport of goods (especially in small quantities) are now available. Today’s inexpensive and convenient means for international payment expedite small commercial transactions. Further, new manufacturing techniques such as 3D Printing provide new dimensions in production capabilities that are available even to small manufacturers.


>> Demographics and Trends – A number of demographic and economic trends provide avenues for product and producer differentiation [6]. Populations are aging rapidly, especially in the developed world — the needs and tastes of older people differ from those of their children. There is an increasing attitude of contra-materialism, which leads to preferences for high touch products. The Great Recession has created a large pool of unemployed and under-employed people that can make significant contributions to small scale businesses, including manufacturers. An increasing number of people are embracing a “do what you love” ethic that favors Greener and more humane products and producers. Changing attitudes toward gender are leading to significantly more participation in and influence from women in all aspects of the business world.


To put all of this into perspective, The Economist recently reported on Etsy [7]. Etsy is an internet sales portal especially for artisanal producers and their products. In 2013, total sales passed a billion dollars before the end of year sales rush began. It continues to grow. An Etsy survey last November indicated that about 88% of Etsy sellers are women offering high touch articles, mostly produced in shops in their home. At least some of those that sell on Etsy are going to grow. Etsy sellers may represent an extreme in Artisanal Manufacturing. But a billion dollar extreme has something to teach the less extreme among us.


Green Soul Botanicals, LLC.


Robin, my daughter, is an herbalist. Green Soul Botanicals, her business, produces the Spa Herbalist line of herbal preparations for use by Spas, massage therapists and wellness professionals. Green Soul sells through Etsy, Amazon, its own website and through direct contact with Spas. In many respects, Green Soul provides a convenient model for Artisanal Manufacturing. In future posts, I will report of Green Soul and its progress.[8]


Thoughtful comments and experience reports are always appreciated.


…  Chuck Harrington
(Chuck@JeraSustainableDevelopment.com)


P.S
: Contact me when your organization is serious about pursuing Sustainability … CH


This blog and associated website (
www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on Wednesday evenings.


[2] The table labeled “American Manufacturing Establishments Lost 1998 – 2011” represents data from the U.S. Census Bureau available at http://censtats.census.gov/cgi-bin/cbpnaic/cbpdetl.pl. The table is similar to Table 2 in  from Job Creation in the Manufacturing Revival, a Congressional Research Report for Congress, 19 June 2013, available at: http://www.fas.org/sgp/crs/misc/R41898.pdf

 

[3] “… being a sustainable business means thriving in perpetuity”; Adam Werbach, Strategy for Sustainability, Harvard Business Press (2009), page 9.

 

[6] How a product is made may be as important for differentiation as the product itself. As a familiar example, consider Ben & Jerry’s ice cream. http://www.benjerry.com/

 

[7]  “The Art and Craft of Business”, an unsigned article in The Economist, January 4th – 10th 2014 issue, page 50f.

 

[8] For more on Green Soul Botanicals and its products, see www.TheSpaHerbalist.com