World-Class Perspectives

Dec. 21, 2004
Defining the optimum in manufacturing operations remains, at best, an inexact science.

In some ways, defining world-class manufacturing is like the story involving blind men and an elephant: How you describe it depends largely on your perspective. While your customers may look to metrics including on-time delivery performance in determining whether your company has cracked manufacturing's upper echelon, suppliers and employees might address the subject from other angles. Respondents to the Fourth Annual IW Census of Manufacturers also hold varying opinions regarding what constitutes world-class manufacturing. This became evident in follow-up phone calls that IndustryWeek made to randomly selected and willing survey participants in an effort to determine what criteria they used in deciding their organizations' location on the road to world-class status. Wherever an organization ranks with respect to the world-class ideal, it must at least have a solid idea of the target at which it is aiming. After all, manufacturers that best balance programs and practices devoted to driving specific results -- with leadership that never loses sight of the bigger picture -- are most likely to lead the pack. Notes survey respondent John Husher, vice president of Micrel-Synergy Semiconductor, San Jose, "One of the biggest factors in being world-class is that you have to have world-class leadership." Rather than focusing merely on financial competencies, he explains, "presidents and CEOs of companies today have to be quite technically capable in understanding the business and the dynamics of it and how it works." Having a balanced outlook is crucial to what Husher considers a second key component of world-class status: the ability to match market growth rates. Indeed, Micrel's focus on the fast-growing market for fiber-optic communications equipment has helped the 550-person enterprise to double its revenues roughly every two years. For world-class companies and those aspiring to that status, nailing revenue and other targets requires a focus on continuous improvement that casts a meticulous eye toward even the most mundane business elements. A company that has found this to be the case is Gibraltar Steel Corp. Based in Buffalo, the $700 million company utilizes technology that enables many of its facilities to be heated with heat exhausted by its manufacturing operations. "Years ago," says Carl Spezio, Gibraltar's executive vice president of manufacturing, "we were one of the first in our industry to move into these types of energy-reduction techniques." Thanks in part to ongoing upgrades in these systems, Gibraltar spends nothing to heat facilities equipped with heat exchangers. Accordingly, Spezio states that from utilities to processes and products used in Gibraltar's manufacturing lines, "what we continue to do is to search out the best technology for the business to ensure that we're a low-cost manufacturer of our products." No less important to many world-class manufacturers is keeping on top of -- or preferably ahead of -- market trends. According to Nicholas Dark, vice president of manufacturing and distribution at Indianapolis-based LogoAthletic Inc., "The demand cycle today is shortened quite a bit, so you have to almost anticipate what your customers want and ship it to them so it arrives the minute they decide they want it." Nowhere is that more true than in the market for sports-theme garments. As a screen printer and embroiderer of Major League Baseball T-shirts, LogoAthletic began cranking out "Subway Series" shirts immediately after the National League championship series' final out. "You have to flood the market," Dark says, "because in a couple days the novelty will have worn off. Everyone will have bought their shirts, and that will be the end of it." Whatever product a company pitches, one element of world-class manufacturing is constant. Says Dann Hoffman, packaging and warehouse supervisor for American Crystal Sugar Co.'s Crookston, Minn., plant, "I would define world-class as producing a product that's marketable throughout the world." And in the sugar business, like many others, Hoffman says quality ranks first among the attributes required to reach this goal. Nor can a world-class producer meet shifting marketplace needs without empowered employees. "I believe that in terms of being a world-class supplier or producer," states Gibraltar's Spezio, "you need to bring the people who run your operations day in and day out into the equation." For Gibraltar this means conducting quarterly profit-sharing meetings with all 3,600 of its employees. "At those meetings," Spezio says, "we discuss what it takes to be top of the heap. We get the people involved, and they become empowered to come up with ideas to improve productivity within their own operations." Of course, open-door policies like Gibraltar's also can result in management's being confronted with questions they might not feel comfortable answering. One way Gibraltar tackles tough questions is by promising -- and delivering -- answers within 24 hours. Healthy dialogue between all levels of a company's hierarchy likewise can keep senior supervisors up to speed on issues including current manufacturing standards. That such communication gaps may exist is evident from the fact that corporate participants in this year's survey tended to supply somewhat rosier reports of their enterprises' progress toward the world-class ideal than did their plant-level counterparts. Moreover, the pursuit of world-class status is at its heart an inexact science. "I don't know if anybody ever really feels they hit it," says Susan Lang, vice president of operations for Award Hardwood Floors LLP, Wausau, Wis. To address this challenge, the 110-employee company attempts under all circumstances to balance what Lang calls manufacturing's four Ms: manpower, methods, machinery, and materials. As Award's approach indicates, world-class manufacturing might be less a destination than a journey. But without an effective road map, a company will go nowhere.

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