In the movie CaddyShack, when asked how he measures himself against other golfers if he doesn't keep score, the character played by Chevy Chase responds, "By height."
In a similar vein, on the 2000 Best Plants application we asked, "What is management's No. 1 indicator of plant performance?" We wanted to know, when measuring themselves against the competition, how plant managers keep score.
The variety of responses was surprising. Some applicants said they focus on financial measures such as operating income, profit before tax, return on assets, economic value, and earnings as a percentage of sales. Others track output, cost, efficiency, and productivity-related indicators such as tons produced, unit costs, units per employee per day, and hours worked per $1,000 in sales. And a few respondents, with their eyes not just on today's results but on the future's as well, closely monitor customer satisfaction, service levels, and customer loyalty.
This is but one example of what makes IndustryWeek's Best Plants program truly representative of manufacturing's diversity, and what makes our job, in choosing the top performers, so difficult.
Cranking the diversity level up a notch, we decided to expand the competition into Europe for 2000. With some of the world's highest labor costs and tax rates, we figured European manufacturers must know how to compete, and would have their own success stories to tell. That search lead to the identification of four plants -- two in the UK, one in Italy, and one in Germany -- in addition to the 10 North American winners, as IndustryWeek's Best Plants for 2000.
These 14 facilities produce an array of products including automotive components -- climate-control systems, spoilers, brake systems, brake pads, and airbags -- as well as hard hats, bar-code scanners, bone saws, missiles, software packages, access controls, and digital storage media.
But they all share a common culture that combines a profound appreciation and respect for their employees with a commitment to being among the best in the world. Diversity is one example. Many companies have put their employees through standard diversity training, where the aim is to get everyone to respect one another's ethnic and cultural differences. That's good, but several of this year's winners cited the diversity of their workforce as a real competitive advantage. These operations deliberately assemble team members from a variety of cultural backgrounds and technical experience with the expectation that they will be able to respond to challenges with truly innovative solutions.
At the Lucent Product Realization Center in Mt. Olive, N.J., which produces wireless communications equipment for locations around the world, workplace diversity has an even more practical application. The plant hosts some 40 tours per quarter. Because the people who work there represent such a broad range of cultural backgrounds, someone can usually show visitors around and tell them about the facility in their native language.
As the profiles in this issue attest, there is no single path to excellence. The plants employ proven strategies including employee empowerment, continuous skill development, visual management, and supplier partnerships, as well as more well-known initiatives such as lean manufacturing, total quality management, and Six Sigma.
Whatever the tactics, management's constant challenge is to identify and implement what's right for their particular location, people, product, and industry. And they must establish meaningful measures of their progress. In filling out the Best Plants entry form, one of the non-winning applicants admitted that they had to call a special meeting to discuss what the plant's number one performance indicator was. Yes, they tracked a lot of metrics and posted them prominently for all to see. But it took some debate to single out the one key measure for the whole operation.
As you will find reading this year's report, one thing that sets the 2000 Best Plant winners apart is that they all know how to keep score.
IndustryWeek began accepting nominations for the 2000 Best Plants awards in October of last year. More than 250 plants were nominated and received copies of the entry form and guidelines. A panel of IW editors reviewed a record number of completed questionnaires, evaluating the entries in areas including quality, customer and supplier relations, employee involvement, application of technology, productivity improvement and cost reductions, on-time delivery rates, manufacturing flexibility, inventory management, environmental and safety programs, new-product development, and overall market results.
Selection of the final winners was aided by a team of outside experts: James Cauhorn, manufacturing advancement manager, J.W. Harris Co. Inc. (formerly of the J.M. Cauhorn Co.); Sherrie Ford, principal, Change Partners LLC; Robert Hall of the Assn. for Manufacturing Excellence; Peter Ward, associate professor, Fisher College of Business, Ohio State University; and John H. Sheridan, founder of the IW Best Plants program. Their evaluations, along with additional information provided by the finalists, were considered in the final stage of judging. The selections did not become official until site visits by IW editors validated the winning entries. Each of this year's 14 winners will receive a commemorative award at ceremonies to be held at their facilities.