There's a simple premise behind our annual profile of the country's biggest and best manufacturers -- in fact, it's so simple an idea that it's one of the very first things we teach our children: how to share. What we do here at IndustryWeek, and what we focus on in every product bearing the IW label, is the sharing of manufacturing operations knowledge.
Beginning this month, and continuing every week for the next year, IndustryWeek will profile one of the IW 50 Best Manufacturing Companies in our e-newsletter, "Leadership Insights from the IW 50" (you can sign up for a free subscription here). The idea behind this weekly project is basically this: Provide manufacturers with real-world lessons on how other companies have solved -- or are addressing -- their manufacturing challenges.
What value is there to knowing who the 50 Best Manufacturing Companies are, or in tracking how well they're doing? That's a fair question, and it's one that Deloitte Consulting helped us answer. Deloitte took a close look at the performance of all the companies on last year's IW 50 list and then compared their performance against that of the companies on the Standard & Poor's 500 list.
Based on Deloitte's analysis, the IW 50 companies outperformed the S&P 500 by a better than 2-to-1 margin over the past three years: 26.8% vs. 10.5%. It's not a story you'll often hear on Wall Street, but facts is facts: World-class (though not necessarily flashy) manufacturers are delivering shareholder value at a rate twice that of the S&P 500, which includes many high-flying financial services and retail companies as well as Internet companies like Yahoo.
See Chain Reactions: David Blanchard's blog about supply chain management.
Before I sign off, I want to pass along a story I heard recently. Apparently this parable dates back to the 1940s, and is usually credited to James Bender, who may have been passing along a tale that was already old when he first heard it. In any event, like any good parable, it's as appropriate today as ever.
There once was a farmer who was famous for growing the best crop of corn throughout the land. Now, growing corn involves a lot of skill and know-how -- irrigation, soil quality, pest control, crop rotation, contour plowing, soil erosion, weather forecasts -- and this farmer knew how to grow corn better than anybody else. He had a collection of blue ribbons as long as his arm as proof that nobody did it better.
When you're that good at something, eventually the press will take notice, so one day a big-city reporter showed up at the farmer's door and asked if he could do a story on the farmer and his corn -- a sort of "best practices in corn management" type of article. In the course of the interview, the farmer casually mentioned that one of his best practices was to share his seed corn with all his neighbors, many of whom competed against him every year at the state fair.
Recognizing a scoop when he saw one, the young reporter asked, somewhat incredulously, "Why in the world would you share your seed corn with the other farmers? Isn't that like giving away the secret to your success?"
The farmer smiled, and responded, "Every spring, the winds blow the pollen from one cornfield to another, so some of my pollen blows into my neighbors' fields, and some of their pollen blows into mine. If all of my neighbors have top-quality corn seed, then I don't have to worry about an inferior grade of corn blowing into my field. The better my competition is, the better I become."
David Blanchard is IW's editor-in-chief. He is based in Cleveland. Also see Chain Reactions: David Blanchard's new blog about supply chain management.