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Articles from The Business Forum Journal

THE ART OF MANUFACTURING
By Ron Chase

This is the first of a monthly series of articles pertaining to manufacturing; what it is, what the state-of-the-art is, examples of it, and some explanations of where it stands today versus pastimes. 

This first article will be a purely subjective look at manufacturing, from my point of view.  Being such, I expect that some will have various opinions about the points made here.  I will ask for inputs on your thoughts later in the article and give you information on how to communicate them.

We begin.  The story starts when I was very young, probably 6-8 years old.  In one of the few vivid memories I have of that time of my life, I received a toy Gasoline Filling Station from Santa at Christmas time.  This little station was amazing!  It looked real, with brightly painted emblems of gasoline and oil companies, stacks of automobile tires, two bays for automotive repair, and four gasoline pumps.  Even more amazing was that the four pumps actually did pump - water, that is, from a plastic reservoir that I could fill.  I did not understand it at the time, but the construction of the toy station was sheet metal, bolts, and metal tabs placed into holes and then bent to secure them.  The reservoir and connecting hoses were plastic and rubber respectively; with the four pump hoses all connected to a plastic manifold.  Each pump had a valve to turn on the water flow, that flow coming from a small hand pump, similar to a hand pump for a bicycle tire.  Truly fascinated by this mechanism, I did not know exactly how it worked, but really enjoyed playing with it. 

“What does that have to do with manufacturing?”  Okay, here it is.  After a time, even though I loved playing with this station, my curiosity got the better of me, and I just had to find out what this contraption was all about.  So, using my father’s screwdriver and pliers and crescent wrench, I set to taking the station apart.  It took me several days to do it, because I wanted to be careful not to damage it.  In the end, I was successful in my endeavor, and the station was now in about 15 or 20 pieces.  None of them was damaged, but I had no clue as to how to put all of it back together again in the proper order to make it operate as before.  After several attempts with not-very-good results, I asked my father, who was truly upset when he saw my dilemma, to help me reassemble it.  He finally did and we were successful. 

The lasting effect of this story was that it began my fascination with things that get built.  There, my friends is the manufacturing connection.  My simple definition of manufacturing is the art of building things.  This fascination was why I got my engineering degree and why I have always worked for companies that are highly technical and that build interesting and complex things.

Now that you know how manufacturing became the focus of my adult working life, let’s talk about one of my favorite subjects - manufacturing in the USA.

Why is the United States of America the greatest nation on earth?  People may have several answers to this question, but I am convinced that it is our ability to manufacture things better than others.  Using this hypothesis, why do Americans manufacture things better?  It is because of the American people!!  Why American people as opposed to British, French, Italians, etc.?  My opinion - because Americans are the result of the mixture of many different ethnic and cultural backgrounds, brought together in an environment that is the right mix of determination, talent, need, and availability of raw resources.  Sort of a comparison to the supposed “big bang theory”, which hypothetically was the right mix of stuff to form the universe and eventually, mankind.  A happen chance, if you will, which just worked right.  Like winning the Revolutionary War, when we had no right to, or like getting Alaska, with its tremendous resources, for a very, very, very low price.  Things have just worked right for Americans.  Not without some struggles, you understand, but in the end, fate and all the other stuff came together and here we are!

Why do I think that manufacturing is the key to American success?  There are reams of data that show manufacturing is the center of our economy, even as software and intellectual property have become more and more a part of the mix.  Each manufacturing job creates a group of other jobs, primarily service-oriented, for support.  This ratio is significant, as much as 5-7 to 1.  This is a proven fact based on several studies done by academicians and business statisticians.  What does this mean?  It means manufacturing is the engine that drives many other components of the economy.  Manufacturing supplies food, medicines, autos, electronics, oil/gasoline, aircraft, computers, and on and on.  I think we can all agree that as manufacturing goes, so goes our basic economy, and certainly a large portion of the U.S. technology base.

From the macro view of manufacturing, let’s travel down one level and look at a composite view of manufacturing companies - what are the common characteristics of these entities, what makes them successful, or not?

People are the key to the success of manufacturing companies!  Surprised? No, you probably are not surprised to hear this emphatic statement.  Well trained and motivated personnel, supplied with the proper systems and tools to effectively communicate, buy, manage, participate, assemble, test, and ship products are the key to success.  As mentioned above, America, with its great diversity and resources has taken maximum advantage of its workforce.

Once we agree that people are the key, what are the components of manufacturing success generated by a good workforce?  These are summarized below:

• Create a vision

• Develop strategic and tactical plans to achieve the vision

• Constantly train and upgrade personnel

• With involvement from all personnel, list the relevant goals  and objectives to track

• Provide the proper tools needed to achieve goals and objectives

• Support and encourage a team environment that works to meet goals and objectives

• Reward teams and individuals for achievement

• Promote a customer environment, whether the customers are internal or external

• Emphasize the number one goal of the organization is customer satisfaction.

 Now let’s define each of the components for success listed above.

• Create a vision – simply means that before an organization attempts to go somewhere, it needs to know where.  A vision statement can be a very powerful tool that becomes the battle cry for meeting end goals.

• Develop strategic and tactical plans to achieve the vision – by preparing plans with enough detail and direction for both short term and long term application, organizations provide a compelling framework to track success.

• Constantly train and upgrade personnel – this is a no-brainer.  The more prepared and assured a workforce is, the more motivated and capable it will be through both success and failure.  Also this type of workforce will provide much better feedback for real time improvements.

• With involvement from all personnel, list the relevant goals and objectives to track – this is pretty much the accepted formula for good project management.  Take inputs from as many persons in the organization as possible to assure buy in.  Know what and how much and when, and track these metrics to know if a plan is working, or if course corrections are needed.

• Provide the proper tools needed to achieve goals and objectives – once people are well trained and motivated, they need the proper tools.  Computer hardware/software systems, well documented and business efficient procedures (ISO 9000 certified procedures are a great example), adequate facilities and equipment that are well maintained, properly laid out work areas, etc.

• Support and encourage a team environment that works to meet goals and objectives – every organization can use some superstars and champions, but in the long run, mixing these few into a team environment is absolutely essential to an organization’s long term, consistently good performance.  We have all seen many examples of teams that had no, or very few superstars, overcome other teams dominated by superstars with excellent teamwork.  The more naturally a workforce adopts a teamwork environment, the more successful it will be.

• Reward teams and individuals for achievement – many recognize that having more and smaller rewards for teams and individuals is generally better than having fewer and larger rewards.  A consistent rewards program fosters consistent personnel involvement and success.

• Promote a customer environment, whether the customers are internal or external – all of us have a customer and the better this is recognized along with the needs of our customer, the easier it is to satisfy those needs. Ultimately, this leads to our external customer’s satisfaction, but before that occurs we must meet each internal customers’ needs.

• Emphasize the number one goal of the organization is customer satisfaction – as just stated above, satisfaction of each internal and external customer must be the main objective of the organization.  If an organization achieves customer satisfaction, all other goals follow.

The nine components listed above are not just pulled from the air.  I have attended several Best Plants Conferences sponsored by IndustryWeek magazine.  At these conferences, I have discussed with key members of the different Best Plants’ teams, what it is that makes them Best Plants?  The answers summarized are the nine components listed above.  Below is the process used by IndustryWeek to identify America’s Best Plants.

Industry Week began accepting nominations for the 1999 America's Best Plants awards in October of 1999. More than 400 plants were nominated and were sent copies of the entry form and guidelines. A panel of IW editors reviewed the completed 15-page questionnaires, which ask detailed performance questions about quality, customer and supplier relations, employee involvement, use of technology, cost reductions, on-time delivery rates, inventory management, environmental and safety programs, productivity, new-product development, and overall market results.  
 
Entries of the 25 plants chosen as finalists were further reviewed by a team of outside experts: Sherrie Ford, principal, Change Partners LLC; Robert Hall of the Assn. for Manufacturing Excellence; John Mariotti, president of the Enterprise Group; Peter Ward, associate professor, Fisher College of Business at Ohio State University; and Rick Purcell, Larry Robertson, and Jack Tamargo of the Best Manufacturing Practices Center of Excellence. Their evaluations, along with additional information provided by the finalists, were considered in the final stage of judging. The selections did not become final until site visits by IW editors validated the winning entries.

Below is listed the median performance achievements by the Ten Best Plants:

• 54.5% five-year cycle-time reduction (the time from start of production to completion of product).  
  
  

• 55% five-year productivity increase (value-added per employee).   

• 0.17% scrap/rework costs as a percentage of sales.
  
     

• 288-ppm customer reject rate on shipped products.   
  
  

• 98.6% first-pass yield for all products.   
  
  

• 20.5% five-year reduction in manufacturing costs, excluding purchased materials.   
  
  

• 88.5 annual work-in-process (WIP) turns.   
  
  

• 30.9% return on net assets (profitability divided by average net assets employed).

Quite remarkable!  Using these key components all of us can better our manufacturing operations by getting our people involved.  We are already the best in the world, but continued improvement should always be our goal.

Thus ends my first article for the Business Forum Journal on the state of Manufacturing.  In the future we will discuss some specific examples of Southern California manufacturing in action.  Recommendations are appreciated for topics to be discussed.  

About the Author:

Ron Chase is a Fellow of The Business Forum Association and is currently Vice President of Operations for Ducommun Technologies, Inc. (DTI), a division of Ducommun Incorporated, a Long Beach based corporation.  DTI designs and manufactures lighted and microwave switches, motors, and resolvers for various commercial, aerospace, and space applications. 

Ron has a BSME from the University of Tennessee, Knoxville, and a Masters Degree in Management from Georgia College, earned while on assignment with the United States Air Force in Warner Robins AFB, Georgia.  Ron flew several different aircraft in the USAF, including a stint as an Instructor in the T-38 Talon and the T-43 Navigator trainer aircraft (Boeing 737 modified for USAF use).  As part of a USAF engineering assignment, Ron also flew in both the F-4 Phantom and F-15 Eagle aircraft while evaluating sidewinder missile performance.

Ron’s career contains both engineering and operations assignments in defense, aerospace, and commercial manufacturing companies, and one significant tour as head of Consulting Operations for the California Manufacturing Technology Center (CMTC), headquartered in Southern California.  CMTC is a non-profit state and federally subsidized company, which provides manufacturing consulting to small and medium sized companies in California.