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World Class Manufacturing: The Next Decade: Building Power, Strength, and Value - Softcover

Schonberger, Richard J.

 
9781476747347: World Class Manufacturing: The Next Decade: Building Power, Strength, and Value
Softcover
ISBN 10: 1476747342 ISBN 13: 9781476747347
Verlag: Free Press, 2013

Inhaltsangabe

Since the invention of double-entry bookkeeping, managers have judged a company's worth by sales and profits. Now, Richard J. Schonberger, the architect of the worldwide Just-In-Time revolution, reaches beyond "financials" to redefine excellence -- and reveals, with new benchmark data, how pioneers become dynasties.
Schonberger's pathbreaking new research reveals that, from 1950 to 1995, while "financials" dipped and soared repeatedly, industrial decline and ascendancy correlated perfectly with inventory turnover -- one of two key nonfinancial indicators and a bedrock measure, along with customer satisfaction, of a company's power, strength, and value. In this immensely readable book, he captures these new metrics -- the true predictions of future success -- in 16 customer-focused principles created from self-scored reports supplied by over 100 pioneering manufacturers in nine countries. Armed with new world-class benchmark data, Schonberger redefines excellence in terms of competence, capability, and customer-focused, employee-driven, data-based performance.
For front-tine associates to senior executives, Schonberger has written manufacturing's action agenda for the next decade. This book will be indispensable reading for manufacturing and general managers in all industries, as well as for pension fund managers, institutional investors, stock analysts, and stockbrokers.

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Über die Autorin bzw. den Autor

Richard J. Schonberger, PhD, is president of Schonberger & Associates of Seattle. He is the author of more than 170 articles and papers, a twelve-volume video set, and several books.

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Chapter 1: Industrial Decline and Ascendancy

We've learned more about running a manufacturing enterprise in the eighties and nineties than in all the rest of the century. And the manufacturing renaissance has not yet run its course. In fact, it has spread to less developed countries and out of manufacturing into the service sector. The many new lessons have transformed consultants into educators, invigorated sleepy community and technical colleges, and made employee training a significant budget item.

Training wasn't important in the sixties and seventies. The existing subject matter was stale and simply did not lead clearly to success. Today's is fresh and does drive success. Widely applied new concepts have transformed industry.

MANUFACTURING PERFORMANCE: DOWN, THEN UP

Consider manufacturing performance in just the last half of this century. It takes the shape of a wide V. It declined for twenty-five years and has been rising ever since:

This twenty-five-down, twenty-five-up phenomenon is a global composite, shifting somewhat by region. For Japan the bottom of the V occurred in the mid-1960s. Then total quality control and the Toyota system kicked in, raising Japan to industrial prominence. Prestigious North American manufacturers -- Japan's natural target in view of the massive U.S. market -- knew they were in trouble by 1975. European manufacturers did not know they had a serious problem until the mid-1980s.

The wide V pattern does not show up clearly in plots of profitability, return on investment, sales, or market share. These "financials" rise and fall with the economic cycle, are influenced by state fiscal and monetary policies, and are easily skewed by protectionist trade practices and internal company manipulations. What, then, might support the wide-V contention?

Anecdotal evidence, for one thing. The research method used by Naisbitt, resulting in his book Megatrends, is to pile up stories from the press to indicate trends. In the late 1970s and early 1980s, the U.S. business press was abubble with stories about a "productivity crisis" and the "hollowing of industry." H. Thomas Johnson provides a concrete case-study example: the once-redoubtable machine-tool maker Burgmaster. It's history, Johnson notes, "falls into two phases: twenty years of excellent growth and profitability in the hands of a brilliant, customer-focused engineer who founded the company, followed by twenty years of decline into bankruptcy in the hands of finance-driven, numbers-oriented professional managers." (The company had been a leveraged buy-out victim of Kohlberg, Kravis, Roberts in the mid-1960s.)

We need not rely on case studies or news clippings. One statistic extractable from corporate annual reports tells the story with surprising accuracy: inventory turnover (cost of sales divided by on-hand inventory). It happens that when a company manages its processes poorly, wastes in the form of inventory pile up.

Exhibit 1-1 shows the pattern of declining inventory removers for several venerable manufacturers. Ford's, Emerson Electric's, Motorola's, Whirlpool's, and Eaton's descents were precipitous. Du Pont's, Eastman Kodak's, Cummins Engine's, Johnson & Johnson's, and Outboard Marine's declines were a bit less sharp but were steady. GE defied the trend somewhat, enjoying rising inventory turnover from 1951 through 1961; but then, reverting to pattern, its turns fell steeply.

IBM, however, gets the prize for longest, steepest decline. Its inventory turnover up to 1961 (the inaugural year for IBM's 360-series computer) was spectacular: in the twenties in 1958 through 1961, then down to twelve and eleven in 1962 and 1963. Exhibit 1-1 picks up IBM in 1964 when its turnover was 6.3; from there it plunges, finally bottoming out twenty-one years later at a miserable 2.1 turns.

SUSTAINED IMPROVEMENT

The long period of decline would be depressing were it not for what happened next. By the early 1980s, the Toyota system had reached Western shores. U.S. manufacturers, first to try it, may have had their share of false starts. On the whole, however, the system proved to be eminently transportable. Exhibit 1-2 and the following discussion provides some of the evidence: sustained high rates of improvement, noted in the form of inventory turnovers, for numerous companies.

U.S. Manufacturers

The star performers are Ford, Deem and Company, TRW, Eaton, PepsiCo, and Hon Industries. All have double-digit rates of improvement in inventory turns -- from 4 percent per year for TRW to 3.6 percent for Ford and 3.3 percent for Eaton. All have been improving turns nearly as long as many of the top Japanese waste cutters -- since 1975 for Ford; 1978 for Deem; 1974 for TRW, Eaton, and PepsiCo; and 1980 for Hon.

Honorable mention -- for annual turn improvements in the 2.5 to 4 percent range for at least ten years -- goes to Cummins Engine, Outboard Marine, Caterpillar, Black & Decker, General Motors, Motorola, Dover, Honeywell, Emerson Electric, and Timken. General Electric has been improving its turns at a roaring rate but only for about five years, which corresponds well with the ascendancy of GE's common stock price and overall esteem.

French Manufacturers

The U.S. is not alone in showing remarkable rates of improvement in inventory turns. The Paris-based consulting firm Proconseil has provided data from seven of its client companies plus one nonclient. The data, dating back to 1979, use sales rather than cost of sales in the numerator of the inventory turnover equation. This upwardly biases the computed turnovers, but the trends are fully valid.

Graphic results in Exhibit 1-3 are for the top four French performers among the eight. Valeo, the automotive parts manufacturer, is the superstar, which is no surprise. In a five-year period starting in about 1984, Valeo completely converted its LaSuze radiator, heater, and air-conditioning plant to cells, called zones autonome de production (ZAP). Each ZAP has its own mix of metal-forming and plastic-molding equipment, tools, product specifications, problem displays, team of ten to twelve associates (per shift), and technical support staff. Valeo's rate of improvement was good from 1979 to 1989 -- and then sharply accelerated. For the whole fifteen-year period its improvement averaged 4.6 percent per year (from 4.2 to 13.6), slightly above that of TRW. Valeo, TRW, and Dana (U.S.) and Lucas (U.K.) are in about the same kind of business -- large, multiplant auto parts manufacturers. They are the West's answer to Japan's Nippon Denso. Like Nippon Denso, their implementation of world-class manufacturing has generally been more impressive than that of the major automakers they supply.

The other three companies represented in Exhibit 1-3 have the following rates of improvement in inventory turnover: Renault (cars), an erratic 4.4 percent for thirteen years; Plastic Omnium (auto pans), 3.9 percent for fourteen years; and Legrand (electrical appliances), 4.9 percent for nine years. In the honorable mention category are Carnaud Metalbox (packaging, affiliated with Crown Cork & Seal), 3.5 percent for thirteen years; Pechiney (aluminum and packaging), 3.1 percent for ten years; Le Carbone-Lorraine (carbon applications), 2.6 percent for eleven years; and Peugeot (cars), 2.2 percent for thirteen years. While both Renault's and Peugeot's improvements extend over the same number of years, Renault's rate far exceeds Peugeot's. Of all the companies whose inventory trend data I've looked at, Peugeot is the only one that experienced a recent several-year decline. Its turns rose steadily from 4.1 in 1979 to a peak of 7.9 in 1988 and then fell for the next five years to 5.8 in 1992 and 5.9 in 1993. Over the last ten years Renault has become a respected, lean, financially...

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Verlag
Free Press
Erscheinungsdatum
2013
Sprache
Englisch
ISBN 10 
1476747342
ISBN 13 
9781476747347
Einband
Taschenbuch
Anzahl der Seiten
288
Kontakt zum Hersteller
Nicht verfügbar
Verantwortliche Person
Simon and Schuster Netherlands BV
info@simonandschuster.nl

Herculesplein 96
Utrecht
3584 AA
Niederlande