Page 33 - MetalForming September 2011
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Continuous-Improvement Practices Boost Sales
20% 10% 0% –10% –20% –30%
13.58%
3.44%
1.51%
–24.54%
Quality Circles Do engage in practice
Preventive Maintenance Do not engage in practice
Fig. 1
The team notes throughout the study that firms, based on the data col- lected, generally can be categorized into four groups, representing four basic paths to success:
• Engineering-intensive firms, employing a high percentage of engi- neers and which profit from a focus on research and development;
• Craft-skill firms, paying competi- tive wages for highly skilled workers and which often participate in the tool- ing industry, while demonstrating below-average rates of formal process- improvement initiatives;
• Clever cost-cutter firms, which tend to pay lower wages for low- or semiskilled labor yet often describe practical or creative solutions that help avoid the need to spend money; or
• Kaizen firms, which pay moderate wages and are most likely to pursue Toyota-style management philosophies to optimize flexibility, serve multiple markets and institutionalize continu- ous-improvement practices.
The survey is unique in that it cap- tures a multifaceted view of each firm. Customer relations, product develop- ment, workforce development, finan- cial and operational issues are stud- ied, so that the result is a textured understanding of the complex reality facing supply-chain firms. The intent is that this information can be used by decision makers at supplier and cus- tomer firms, as well as in government,
to understand the specific challenges that individual firms face, and the over- all challenges that threaten the health of the automotive supply chain as a whole.
Possible Futures: Collaborative
The research uncovers evidence of two possible futures for America’s auto- motive industry. One is characterized by long-term collaborative relation- ships between firms at all tiers. In this model, customers and suppliers work together on (and benefit together from) product development, cost savings or other trans-tier issues.
“With foresight and long-term thinking,” say the survey’s authors, “some firms have completely revamped their strategies for profitability, adding value to products instead of simply cutting costs...finding that they fare better when they can link their product strategy, manufacturing process and workforce development strategy in a way that allows them flexible or agile production.”
Such a business model allows man- ufacturers to outperform competitors in quality, problem solving and just-in- time production and delivery. “The result can be larger profit margins for the firm and higher wages for workers,” the survey finds.
The study also reveals that “the recession increased the prevalence of collaborative relationships.” An inter-
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% Change in Sales
