Nearly a decade ago, with the hope of accelerating the renaissance of American manufacturing, IndustryWeek published its first salute to "America's Best Plants." At that time, IW Senior Editor John Sheridan defined "excellence in manufacturing."
"To a large extent, it embodies just-in-time (JIT) techniques -- the use of manufacturing cells, quick-setup methods, and continuous-flow production -- to shrink manufacturing cycle times, eliminate waste, and promote quick response to customer demands."
Sheridan went on to list such ingredients as sensible use of technologies, simultaneous engineering, flexible equipment and people, extensive employee training, and partnerships with both customers and suppliers.
|Beiersdorf Inc., Cincinnati|
|Dell Computer Corp., Americas Enterprise Systems, Austin|
|Delphi Automotive Systems -- Saginaw Steering Systems, Saginaw, Mich.|
|Eaton Corp., Aeroquip Global Hose Div., Mountain Home, Ark.|
|Foxboro Co., Foxboro, Mass.|
|JLG Industries, McConnellsburg, Pa.|
|Johnson Controls Inc., Athens, Tenn.|
|Porter-Cable Corp., Jackson, Tenn.|
|Raytheon Missile Systems, Tucson|
|Scroll Technologies, Arkadelphia, Ark.|
Such concepts and initiatives remain top priorities for the ten 1999 Best Plants winners. Which is not to imply lack of progress. Real changes and improvements take years of careful development, planning, implementation, and refinement. And the leading companies continue to expand the definition of world-class performance.
This never-ending dedication to continuous improvement is embodied by the first two-time Best Plants winner, Foxboro Co., Foxboro, Mass. (Previous winners become eligible again after six years.) This maker of electronic process-control systems has continued to make significant productivity improvements and cost reductions since it won recognition in 1992.
As Foxboro and the other nine winners continue to push the envelope, the level of competition increases every year. The 1999 Best Plants winners report slightly better results than last year, as those plants did when compared to the year before. As a group, the 10 winners achieved a median:
- 54.5% five-year cycle-time reduction (the time from start of production to completion of product).
- 55% five-year productivity increase (value-added per employee).
- 0.17% scrap/rework costs as a percentage of sales.
- 288-ppm customer reject rate on shipped products.
- 98.6% first-pass yield for all products.
- 20.5% five-year reduction in manufacturing costs, excluding purchased materials.
- 88.5 annual work-in-process (WIP) turns.
- 30.9% return on net assets (profitability divided by average net assets employed).
What's their secret? As Sheridan noted back in 1990, all Best Plants practice good people management. Managers at these exceptional facilities read the same books, attend the same trade shows and conferences, and have access to the same technology as their competitors.
But their ideas are more effectively implemented because they don't act alone. Production teams, armed with appropriate training, wage an all-out war on waste. Workers who run the machines personally evaluate and set up new technology.
"Management understands where lies the gold," notes Beiersdorf Inc., one of three union facilities to earn recognition in 1999. "The power of employees who are in support of company objectives is the catalyst sparking genuine improvement."
All of this year's winners harness this power through some form of team structure headed by nonmanagement team leaders. The winners single out communication, training, and recognition of team performance as keys to the effectiveness of these teams. On average, this year's Best Plants conduct more than six days of formal training per production employee per year. And all of the winners offer some form of financial reward for team achievement.
"Effective and open communications plays a huge role in creating a trusting organization," Porter-Cable Corp. says. "It's amazing what people will do if they just know why they are doing it."
"Without top-notch people taking responsibility for improvement and making things happen, we will be relegated to also-ran status," adds Eaton Corp.'s Aeroquip Global Hose Div. The plant is the second winner in as many years from Mountain Home, Ark., a town of about 10,000 people. It is also the second Aeroquip division winner. Which goes to show, with the right training and management support, how powerful and contagious employee empowerment can be.
IndustryWeek began accepting nominations for the 1999 America's Best Plants awards in October of last year. More than 400 plants were nominated and were sent copies of the entry form and guidelines. A panel of IW editors reviewed the completed 15-page questionnaires, which ask detailed performance questions about quality, customer and supplier relations, employee involvement, use of technology, cost reductions, on-time delivery rates, inventory management, environmental and safety programs, productivity, new-product development, and overall market results.
Entries of the 25 plants chosen as finalists were further reviewed by a team of outside experts: Sherrie Ford, principal, Change Partners LLC; Robert Hall of the Assn. for Manufacturing Excellence; John Mariotti, president of the Enterprise Group; Peter Ward, associate professor, Fisher College of Business at Ohio State University; and Rick Purcell, Larry Robertson, and Jack Tamargo of the Best Manufacturing Practices Center of Excellence.
Their evaluations, along with additional information provided by the finalists, were considered in the final stage of judging. The selections did not become final until site visits by IW editors validated the winning entries. Each of this year's winners will receive a commemorative award at ceremonies to be held at their plants. To help other manufacturers discover and pursue best practices -- the overall mission of the Best Plants program -- we've invited representatives from the winners to tell their stories at Best Plants conferences next spring in Cincinnati and Las Vegas.