Manufacturing Excellence: Missed Opportunities
May 27, 2009
Anytime I try to analyze why U.S. businesses appear to be losing their competitive edge, I look not just at manufacturing, but also at opportunities throughout the organization.
By reviewing the table, “Excellence Opportunities,” one can see that it is not the manufacturing operations alone, or just the employee union and management relationship that hampers success; instead it is the mediocrity in every department that leads to overall poor performance, resulting in unacceptable financial performance.
Genichi Taguchi said that whenever a performance deviates from its intended target, society pays for the deviation. Everyone must recognize that any deviation from its target has financial implications for either the producer or the customers. We all pay for it. Striving for perfection in everything that we do must be the only mantra that we recite every day.
So who is responsible for corporate performance? Well, we get paid for our position of responsibility. If we are getting paid more that means we are more responsible. Therefore, leadership is entitled to the credit for good, as well as blame for the poor performance. A decision by a CEO can affect the entire company vs. the manufacturing worker who may not be even allowed to make a decision.
The CEO must lead and inspire employees to bring out their best, managers must accelerate improvement in every department and employees must be prepared for innovating new solutions for profitable growth.
Take a look at typical estimated performance of various departments in the table, “Excellence Opportunities.” One can question the performance figures and ignore the sense of urgency for challenging the status quo. However, we should look critically at every activity for deviation from perfection, with perfection being defined as a target that is chosen based on customer requirements and profitable growth objectives.
My research has shown that absence of targets and thorough preparation lead to marginal performance, waste in operations and loss of profitability. The corporate profitability is a sum of profits generated in each department. If five departments operate perfectly, and one operates terribly, the corporation may not be profitable. It also is possible that excellence in one area compensates for sloppiness in other departments; however, this only hides the opportunity for higher profit.
We need to examine what can be done to contribute to the profitable growth of our organization, do our best and stretch ourselves to leave a legacy of excellence. More importantly, we all must identify what we can do to stop the declining trend in our standards of living instead of looking for what government can do for us.