[Today] the changes that so many companies are making are more than a response to “globalization.” They denote nothing less than the obsolence of the corporate model many of us have grown up with. For some people, it won't be easy to let go of old concepts, old hierarchies, old sources of power—but it's mandatory to think anew.
—Vernon R. Loucks, Jr., Chairman and CEO, Baxter International, in Review, 1990.
It is the committee's strongly held conviction that the worldwide competitive environment will richly reward the manufacturers who adopt the foundations of manufacturing while penalizing those who do not. This report has focused principally on the foundations and the rationale for identifying these as keys to achieving world-class status. It concludes with a few brief comments concerning the actions that must be taken to make the foundations common practices and some suggestions concerning the likely implications of their adoption.
The challenge posed by the worldwide competitive environment will demand many things of the enterprise, particularly leaders who understand the system of manufacturing, its elements and their interrelationships. Leaders of successful enterprises will have an enhanced understanding of the capabilities of their competitors; they will strive to eliminate organizational parochialism; and they will develop the ability to respond more quickly to
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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE 6 Educational and Technological Challenges [Today] the changes that so many companies are making are more than a response to “globalization.” They denote nothing less than the obsolence of the corporate model many of us have grown up with. For some people, it won't be easy to let go of old concepts, old hierarchies, old sources of power—but it's mandatory to think anew. —Vernon R. Loucks, Jr., Chairman and CEO, Baxter International, in Review, 1990. It is the committee's strongly held conviction that the worldwide competitive environment will richly reward the manufacturers who adopt the foundations of manufacturing while penalizing those who do not. This report has focused principally on the foundations and the rationale for identifying these as keys to achieving world-class status. It concludes with a few brief comments concerning the actions that must be taken to make the foundations common practices and some suggestions concerning the likely implications of their adoption. The challenge posed by the worldwide competitive environment will demand many things of the enterprise, particularly leaders who understand the system of manufacturing, its elements and their interrelationships. Leaders of successful enterprises will have an enhanced understanding of the capabilities of their competitors; they will strive to eliminate organizational parochialism; and they will develop the ability to respond more quickly to
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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE market changes. Realizing the benefits of a positive response to these challenges will place unusual demands on all of the participants of the enterprise. Although success in implementing the foundations depends on many things, the committee emphasizes that they represent a system of actions that cannot be embraced piecemeal. They are as interrelated and as overlapping as are the elements of the manufacturing system that they seek to improve. They must be viewed as a system of action-oriented principles whose collective application can produce important improvements in the manufacturing enterprise. Effective communications are obviously a key element of success in implementing the foundations. But it must be recognized that it is easier to develop the mechanisms for collecting inputs from many sources than it is to create an environment that generates rapid, sensitive, and consistent responses to those many voices. This is especially true for those broadly defined as customers. It makes little difference whether the customers are internal to the enterprise, such as those employed in the firm's production activities chain, or organizationally separate from the enterprise as purchasers and users of the products manufactured. Encouraging the active participation of customers in the affairs of the enterprise places important obligations on both the customers and the enterprise. Organizing the information, assigning responsibility for response, allocating resources, and training people to be good listeners is a daunting task for the enterprise. The customers must also learn the areas in which they have a rightful role in helping change and in ensuring that their comments are factual and responsible. Patience is required in developing effective communication channels and in identifying the proper issues to be discussed. Just as the customer must become an increasingly influential member of the manufacturing system, so must also the suppliers be viewed as more than just a provider of materials or components. The long-term commitment of the enterprise to a few key suppliers and of those suppliers to the enterprise demands a level of understanding and trust that is not easily created, but once created must be constantly nurtured. This is likely to be a fragile relationship unless all parties recognize and are willing to work diligently to maintain it. Working as a family, sharing both the burdens and the rewards, and offering and accepting friendly and constructive criticism are not only honorable objectives but increasingly important factors in the success of the manufacturing enterprise in this competitive environment. To succeed demands a level of commitment and openness that may require a fundamental change in outlook on the part of everyone involved with and in the enterprise. The creation of an environment that encourages employee involvement
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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE and employee empowerment as a means of achieving continuous improvement has been demonstrated to require an unusual commitment of time, resources, and training. The effort must be maintained and nurtured over a long period of time. A manufacturer is unlikely to succeed if these tasks are approached as interim measures in response to temporary market pressures. The successful manufacturing system will most likely be one that has evolved into an organization in which the participants work in harmony with an appreciation for the particular contributions of each member. Management, employees, suppliers, and customers will share common interests and goals and will create a team to work toward achieving those goals. It is the responsibility of the management to provide consistent leadership for the organization as it strives to reach these levels of integration. Wilson's jazz ensemble provides a model of the organizing, coordinating, and direction-setting determinants for successful manufacturing systems. CHALLENGES FOR THE EDUCATION SYSTEM The committee believes that the implications of these foundations are important to elements of our society beyond that normally described as the manufacturing enterprise. These include the educational system, which is training the next generation of employees, and the technical community, which is responsible for creating new understanding of phenomena and providing new tools for solving both current and future problems. Since neither of these sectors has been extensively discussed earlier in this report, the implications for them will be examined somewhat more fully in this chapter. The committee has argued throughout this volume that the modern manufacturing enterprise cannot be competitive if it continues to operate as a loosely coalesced group of independent elements—elements whose identity depends on a discipline or a detailed job description. Gibson (in this volume, p. 150) emphasizes that “the elements of Taylorism are . . . no longer right for modern America.” Gibson argues that for the educational system, the approach established by Taylor became “the universal paradigm” for engineering education, and, although we are in the process of changing that approach, Taylorism remains the predominate model for education today. In Gibson's view, “This academic process is patterned after the old Tayloristic suboptimization of individual operations on a manufacturing line with no thought for overall production efficiency. ” If, indeed, this is a proper description of the current focus in education, one must ask, as Gibson does, whether we are encouraging the proper outlook and training for those who will manage and operate the next generation of manufacturing enterprise. Gibson has called for a reassessment of the current approach to education for the next generation of practitioners or professionals, whether those pro-
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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE fessionals find themselves in management, technical, or nontechnical roles. If the success of the manufacturing enterprise depends on eliminating organizational barriers and enhancing communications, should we not expect that similar changes would be beneficial for the educational system that is training the people who will lead and operate these systems? Accomplishing changes of this extent in the educational system will require leadership with the same dedication and vision that has characterized the industrial leaders who are rejuvenating the industrial system. Gibson has suggested an in-depth analysis of what the rapidly changing industrial environment implies for the educational system. THE TECHNOLOGICAL CHALLENGES In Chapter 5 we saw that the successful enterprise will eventually find that technology will become a key ingredient in achieving a competitive advantage. The process by which needs are assessed and then both human and financial resources are committed to the search for new technologies is complex. In some cases this process will involve the support of substantial in-house activities that have the freedom to explore the far reaches of technology while remaining in close contact with the near-term problems of the enterprise. In other cases it may mean developing relationships with other companies, universities, or not-for-profit organizations. The proper mix of surveys with the development of technology is, and will continue to be, an important decision for management. Orchestrating these efforts and guiding them with vision and imagination will place special demands on management. It will, above all, demand a renewed understanding of, and an appreciation for, technology—qualities that have frequently been missing in the leaders of the nation's industrial complex. As difficult as these tasks may be for the large organization, it may be almost impossible for some small organizations whose raison d'être is not technology, to use technology as a competitive tool. Many small companies have no research capability, and their resources are sufficiently limited that they are unable to allow their employees to focus on such matters. These small firms are often dependent on vendors and suppliers to bring them new ideas and opportunities. Some may obtain assistance from the principal customers for their products if those customers happen to be large firms and if the relationships are sufficiently mature to allow an unencumbered exchange of proprietary technical information. Others may be able to use the resources that state governments have introduced to encourage economic development, such as the state technical assistance programs, programs that involve information transfer through centralized data bases, and the research capabilities of local universities and technical colleges. Recognizing that about 40 percent of the value added in manufacturing is generated by
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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE companies with fewer than 100 employees, it seems clear that ways must be found to offer these small firms timely access to technological change. Since many of these small manufacturers supply the larger enterprises, the competitiveness of the entire sector is critically dependent on the ability of each segment to improve. Whatever the source of help, it is clear that small enterprises, which constitute a significant fraction of the manufacturing capability of this nation, deserve considerable attention and assistance. Ensuring that the technological infrastructure of the manufacturing sector—viewed in the national sense—is being supported at the proper levels presents a particular challenge to all U.S. manufacturers. With a largely decentralized system of supporting, managing, and disseminating information relative to technological developments, it is often difficult for any single organization to develop the breadth of vision needed to ensure that its own interests are being properly accommodated. The implications of the competitive environment that has evolved over the past 20 years are profound. Just as no single element in the manufacturing system can ensure that an enterprise will be successful, so can no single sector of the national infrastructure ensure that the industrial sector will be competitive. A commitment to renewal of the U.S. manufacturing sector is essential. A willingness to learn from each other is critical. No one can afford to take the risk of waiting for others to show the way. All manufacturers must embrace the doctrine that continuous improvement demands their immediate and unrelenting attention. U.S. manufacturers cannot allow their competitors to set the standards by which success will be achieved and to be the leaders in meeting those standards. The United States must establish as a national goal a strategy that encourages and supports the adoption of the foundations of world-class manufacturing systems.