In 1998 General Cable Corp. had edged into global production, with 18 manufacturing facilities in three countries. Fast forward to 2012 and the Highland Heights, Ky.-based manufacturing firm has expanded to 47 manufacturing facilities across 25 countries.
It hasn't been an easy course. The company develops, designs and manufactures copper, aluminum and fiber optic wire and cable products for a variety of markets. The challenge General Cable faces is in differentiating itself from the competition when everyone largely uses the same raw materials, the same processing equipment from the same suppliers and then produces to a 90% common specification.
Some 10 or so years ago, senior leadership seized upon lean manufacturing as a means to differentiate the company, later complemented with a Six Sigma methodology. Lean's attraction for General Cable was both its waste-elimination component and its reliance on the talents of the entire workforce to continually improve.
"In order to have control of our destiny, we needed to have a best cost position," says Gregory Kenny, General Cable's president and chief executive officer.
Today, he says, "We've got an army of change agents who think about lean as a natural instinct as opposed to, 'Oh it's time to think about lean.' Making the company better continually has allowed us to really get through some tough times."
In 2011, two General Cable manufacturing plants earned the title of IW Best Plants winner in recognition of their achievements in operational excellence. Kenny and Mark Thackeray, General Cable's senior vice president of North American operations, recently spoke to IndustryWeek about the impact lean and Six Sigma have had on the company's bottom line and global growth, and the role senior management plays in driving a continuous-improvement culture.
IW: Does this focus on continuous improvement translate to bottom-line benefits? In what ways has it impacted the financial health of General Cable, the corporation?
GK: In North America, where we've been at it for a good 12 years we're going through a very difficult construction environment, and while not every one of our products is impacted directly by construction, North American demand is off from the '05-'06 peak, broadly, by 20% to 30%. Yet our operating performance -- everything from service metrics, lead times, working capital efficiency, SG&A -- is very good, and we're growing with our key customers. So we're making money in as difficult a time as we've ever seen from a macro environment.
Today our U.S. operations are operating at three or four times the profitability that they were in the last, much gentler down cycle [in 2001-2003]. That's a result, in good measure, of this lean journey, which is taking fundamentally tens of millions [of dollars] of waste out of the system.
IW: How so?
GK: We've run probably thousands of [improvement] projects over the last 12 years, and I would say the average project has a measurable payback of $10,000 to $100,000 -- sometimes much bigger. The cumulative effect of that is pretty profound.