How IW Best Plants winners leverage production to boost the bottom line.
I'm not sure when or why it happened, but too many public-policy and manufacturing leaders view factories and production workers as costs to be cut, rather than as sources of competitive advantage to leverage. Over the past decade, it's become almost a truism that production is a function that can be done by uneducated, unskilled laborers in developing countries. As for production that remains in the United States, many believe that automation is the best way to squeeze out still more costs. For too many leaders, the logic seems clear: The research, design and engineering of products provides the value-add and should be kept in the United States, while production can be done anywhere.
That's an overstatement, of course. Many manufacturers understand that only certain types of manufacturing should be moved offshore. They continue to produce the higher valued-added products -- those with the latest technology, requiring the highly skilled employee -- in the United States. Likewise, most manufacturers employ production technology to increase quality and speed delivery as well as to cut costs.
Still, the practice of moving plants overseas and deploying technology to reduce labor costs has perpetuated the myth that production -- actually making the products -- contributes little to a company's competitive position.
Not so with IndustryWeek's Best Plants winners. Each year, the winners demonstrate the value of the production process and plant-floor employees -- operations excellence -- to a company's financial success. This year is no different.
Exhibit No. 1 is General Cable Corp., a company that has won numerous Best Plants awards through the years, including two this year. In this upcoming issue you'll find that Gregory Kenny, General Cable's president and CEO, credits the company's growth to the continuous improvement of its production process, driven by lean manufacturing and Six Sigma practices. With the strategy, Kenny asserts, "We are making money in as difficult a time as we've ever seen."
Together, the Best Plants stories for this year make the case for using production to gain a competitive edge, from Toyota Industrial Equipment Manufacturing, whose "Top Gun" associates are credited with saving the facility $717,000 in one year; to Klein Steel, which credits the production efforts for driving growth in a depressed economy; to Ethicon Inc., which expects production efficiencies to add new products and increase revenue by 21% over the next three years.
More important, the winning plants' stories provide significant detail about how to leverage production to deliver more value to your customers and to drive bottom-line results, so you can jump-start or turbo-charge your efforts to leverage your factory operations to gain a competitive edge.
Pat Panchak is Editor-in-Chief of IndustryWeek.