Sometimes You

Dec. 21, 2004
World-class competition requires painful but beneficial change.

Sometimes you gotta downsize. Sometimes you gotta reengineer. Andsometimes you gotta pay attention to what your world-class competitors are doing. Sometimes you even gotta merge, spin-off, sell, buy, orreinvent your company. Or yourself. Whether you want to or not. During the 1980s American manufacturers got their comeuppance. They lost their edge as a major manufacturing powerhouse. Industries dominated by American manufacturers were swallowed whole by foreign companies.Automobile, bicycle, steel, sports equipment, shoe, and electronics manufacturing are just a few of the industries that were lost to morecreative, more daring, more technologically advanced, morequality-oriented, more astute marketers from other countries. Toyota cars, Gucci shoes, Benetton sweaters, Mercedes diesel engines, Honda motorcycles, and Suzuki sports equipment have become best-sellingproducts in the U.S. All are manufactured by off-shore world-classcompanies. Manufacturing wisdom from gurus such as Deming, Juran, Ishikawa, and Feigenbaum fell upon deaf ears in the U.S. Americans were reluctant toadmit they were out of touch. It wasn't until the 1980s that they awoke to the need to do something they had been reluctant to do: admit that the Japanese, Germans, Koreans, and others were out-manufacturing them. World-class competition was producing better products and providing greater customer satisfaction in many industrial markets that had once been the American manufacturer's exclusive domain. That's when theydecided it was time to do something to protect their markets. They stopped thinking about being American manufacturers and started thinking, acting, and producing like world-class manufacturers instead. That's when they became competitive again. In the 10 years that followed, American industry learned how to apply Japanese-developed techniques such as shortening production cycles(leadtime), improving product quality, benchmarking, and installing just-in-time inventory systems. According to Richard J. Schonberger, an apostle of world-class manufacturing, those who are ready for change should take a litmus testto determine world-class competency. In his book World Class Manufacturing: The Next Decade (1996, Free Press) Schonberger states that "A good management concept, application, or plan must employ threemeasurements: (1) serve the best interests of the customers, (2) have the commitment of the whole enterprises, and (3) be data (fact) based." Today, the industrial world is a case study of successful revolutionary manufacturing change--changes based on customer needs, on manufacturing know-how and technology, and on how customers are reacting to change. They now understand that the answer to loss of markets is neither to bedefeatist about foreign manufacturing threats nor to encourage protectionism. It is to change. And to adapt. The Massachusetts Institute of Technology's $5 million, five-year studyon the future of the automobile is a valuable resource. Its findings are summarized in the book by James Womack, Daniel Jones, and Daniel Roos,The Machine that Changed the World (1990, MacMillian Publishing Co.). It credits the automobile industry with two major ideas about howto make things in the last century: Mass production swept away "craft" production, now lean production is obsoleting mass production. Today, to produce a new car you gotta develop a lean auto company. To produce anynew product you intend to sell in world markets, you gotta have a lean company that thinks lean. Thinking lean requires a collective effort that can be difficult and painful. But giving birth to any brainchild, even the ones that are difficult, is an infinitely better choice than suicide. Sure, becoming a world-class manufacturing company takes courage, exceptional management, leadership, and people. It also takes luck. Just remember, when you gotta do what you gotta do, the quicker you do it, the luckier you get.

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