Unleashing The Entrepreneurial Spirit

Dec. 8, 2005
Employees are at the center of lean model.

As the global manufacturing base has developed over the past 50 years, U.S. manufacturing companies in their effort to maintain a competitive advantage have been blessed with a highly developed infrastructure. We have had an abundance of natural resources, a strong national transportation system, highly skilled labor, an efficient capital allocation system, and the professional management skills to use these assets.

Until now, the global marketplace has also been thin of strong competitors. No longer. In the past several years, other nations have risen with the help of rapidly developing assets, as well as advantages in natural resources and cheap, effective labor. These competitive challenges pose a crucial question: How should U.S. manufacturing channel its energy and investments in infrastructure?

Tom Scalf, director of operations for NAFTA filter manufacturing, Donaldson Co. Inc.Donaldson Co. operates 36 manufacturing and distribution facilities around the world, organized into three operating regions: the Americas, Europe and the Middle East, and Asia. Employing the age-old model of focusing on quality, delivery and cost, our goal is to provide maximum value to the customer. In the U.S. operating group, as we strive to meet ever-increasing levels of competition and higher customer expectations, we are trying to find new ways to exploit our current infrastructure advantages, the most important of which are our existing investment base and our skilled workforce. Lean manufacturing is at the center of our efforts.

Donaldson has realized two significant benefits by using the lean manufacturing model. First, lean manufacturing does not typically require large capital investments. Instead, it focuses on improving existing processes and fine tuning them by eliminating waste in the system. This has allowed Donaldson to use its capital investment to expand our product offering and to improve our service level with new facilities closer to our customers.

Second, lean uses the best base of knowledge any business has -- the employees who are actively engaged in the work. Gone are the days when managers sit in an office and determine the best way to assemble or reduce the cost of a product. Today, we engage our employees in teams to determine the best methods to complete the work they do every day.

America has a profound competitive advantage in its workers. Our employees have an unusual combination of a bias to action and an innate sense of commerce. America is a country of entrepreneurs. This is not only apparent in those who actually start businesses, but also is found in our production workers, accounts payable clerks, engineers, and supervisors. This is potentially our most powerful asset, yet it is one to which we frequently pay only lip service.

Donaldson Co. Inc.
At A Glance
To unleash the entrepreneurial skills of our people, we need a strong educational system, as well as a strong management effort to channel their bias to action. By better preparing our students to enter the workforce, we can provide the catalyst for continuous improvement that American businesses need to remain strong.

How can a company such as Donaldson support improvement in education? Since most of our facilities are in smaller communities, we take an active role in the educational system through participation in programs such as Junior Achievement, local manufacturing education outreach programs, support of technical colleges, open houses, and internships. We also are investing more in training our own employees -- and the leaders who manage them -- to maximize these skills.

By developing our current and future employees -- our most precious assets -- we can build a solid infrastructure of skilled workers, leaders and innovators who will keep our American manufacturing companies on the competitive edge for years to come.

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